US Reduction of Tariffs on Metal Products May Not Benefit India in a Big Way
Lower duties on select equipment offer modest gains as core metal tariffs stay high.
Chennai: The US administration has reduced the sectoral tariffs on industrial and agricultural equipment made of steel, aluminium and copper, extended the number of metal products under reduced tariffs and lowered tariffs on products made of US-origin metals. The decision will benefit some of the metal products exported from India.
The tariffs on agricultural equipment like combines and harvesters, as well as certain other equipment, have been reduced from 25 per cent to 15 per cent. The category of industrial equipment subject to the 15 per cent tariff has been extended to include mobile industrial equipment, like bulldozers and forklifts, when imported from trade deal countries that are entitled to such treatment.
Foreign companies exporting capital equipment using at least 85 per cent U.S.-melted and poured or smelted and cast steel or aluminium by weight, qualify for a 10 per cent duty rate.
These tariff changes are in effect only till December 31, 2027. However, steel, aluminium and copper metals will continue to face 50 per cent duty.
According to the Engineering Export Promotion Council, the changes offer very limited benefits to Indian exporters. The exporters of agricultural machinery are the ones who would have some benefits. But India is not a major exporter of agricultural machinery.
“As US steel and other metals are costlier, Indian manufacturers do not use them much. Hence the 10 per cent rate for using U.S.-origin metals, will hardly benefit. The reduction for countries with trade deals does not apply to India,” said Pankaj Chadha, chairman, EEPC.
“The core issue remains unchanged: Indian exports of steel, aluminium and copper products continue to face the sectoral tariffs of 50 per cent, while many downstream metal products remain subject to a 25 per cent duty,” said GTRI.
