New Delhi, June 29: The US has stopped the duty-free import of Indian gold jewellery and brass lamps.
These items were offered relief under Washington’s generalised system of preferences (GSP) programme.
India exports around $1.6 billion of gold jewellery and $20 million of brass lamps to the US every year.
The changes mean exporters of gold jewellery from India, the world's largest producer, will now have to pay an import duty of 4 per cent.
Indian officials see the move as a retaliatory action on the part of the US for not toeing its line in the recent WTO trade talks.
Commerce minister Kamal Nath, in Washington for talks with US officials, said there could be consequences of the removal of the relief. “We will take note ... if and when the moment comes. We’ll remember it wasn’t extended.”
At the WTO talks last week in Germany, Nath had refused to give in to the demand for sharply reducing the tariff on the import of manufactures from the West in return for the halving of farm subsidies by the EU and the US.
Brazil, too, has been at the receiving end of US moves on the generalised system of preferences.
The US has revoked the duty-free status for the import of brake and brake parts and ferrozirconium from Brazil. The country had sided with India in last week’s acrimonious talks held in the German city of Potsdam.
Brazil ships $242 million in brake and brake parts and $700,000 in ferrozirconium.
The officials predicted that this would queer the EU and America’s pitch for the easier import of their wines and spirits into India. “The countervailing duty that we had planned to cut on liquor imports may still be done, but state duties may take longer to sort out,” the officials said.
The officials, however, refused to say whether this would escalate into a full-fledged trade war. They described the duty imposition “as part of a diplomatic game all nations play to get their way”.
Today’s decisions were part of a US presidential proclamation bringing about changes in the GSP programme.
Under the scheme, the US gave duty-free access to $32.6 billion worth of goods from developing countries in 2006.
After last week’s aborted WTO talks, the US, too, had accused India and Brazil of making unreasonable demands.
Besides the items from India and Brazil, methanol from Venezuela, wiring harnesses from the Philippines, gold jewellery from Thailand and kola nuts from Ivory Coast have also faced the axe.
The revamped GSP programme allows the Bush administration to remove the benefit when the import of a good from a country exceeds the annual cap of $187.5 million or comprises 75 per cent of the total US imports of that good. US trade officials said they terminated the eligibility for 21 products after a review.
They maintained the eligibility for 115 items from countries whose trade exceeded the statutory limits in 2006.