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New Delhi, February 25, 2020
Flagging the high duties, US President Donald Trump here on Tuesday said India imposed the highest tariffs on US products and cited the case of Harley-Davidson bikes.
"We are being charged a large amount of tariffs. I think you have to pay the highest tariff when you deal with India. Harley-Davidson has to pay tremendous tariffs when they send motorcycles here. When India sends to us, there is virtually no tariff. For the most part, there are absolutely no tariff. I just said that's unfair and we are working it out," the US President said at a press conference on the second day of his two-day India visit.
"India is probably the highest tariff nation in the world. We have to stop that. I think we are understanding each other," Trump said.
India levies 50 per cent duty on some Harley-Davidson bikes and it has been a major pain point for the US. Trump has been seeking lowering of tax on them in India. In June 2019, Trump had said 50 per cent import tariff on Harley-Davidson was unacceptable and India must remove that.
Though there were announcements from both sides to seal a larger trade deal at a future date, the USA has been asking India to lower tariffs on many products, including almonds, chickpeas and bikes. It also wants greater access to India's dairy and agriculture markets.
Earlier, Commerce and Industry Minister Piyush Goyal said India and the US could finalise a larger trade deal "much faster" and expressed the hope they would soon be able to close the first set of limited trade package and its legal vetting.
"Hopefully, we will close the first set of the limited engagement that we have discussed and finalised. We will get into legal vetting and close that quickly," he said at a CII event.
Earlier at Hyderabad House, Trump in a joint statement said a trade deal was in the works, but didn't elaborate.
Prime Minister Narendra Modi said the Commerce Ministers of both the countries had positive talks. "Both of us have decided that our teams should give legal shape to these trade talks. We have also agreed to open negotiations on a big trade deal," Modi said.
The US has also been complaining about trade deficit. In 2016, the US trade deficit with India was $24 billion. It came down to $22 billion in 2017 and is $20 billion now, as per the Commerce Ministry data. India expects this to decline with increasing oil and gas imports.
In the Budget for 2020-21, India also made changes to the Customs Act to insert certain unspecified obligations on the importer while expanding the ambit of preventing injury to domestic economy due to uncontrolled imports, inviting criticisms for being protectionist.
India-US trade hit $142.6 billion in 2018, according to official US data, up from $11.2 billion in 1995. During the same period, the US goods and services trade deficit with India shot up from $2 billion to $25.2 billion, and hit a peak of $31 billion in 2014.
Recently, the US became India's top trading partner beating China.
In a tit-for-tat exchange in 2018, the US imposed fresh tariffs on aluminium and steel imports from several countries, including India.
New Delhi responded with a list of retaliatory tariffs, including on US almonds, chickpeas and apples, but held it off from applying.
Soon after, the Trump administration ended preferential tariffs for Indian exports and India responded by implementing the retaliatory tariffs.