US businesses and diplomats are pressing India to cut tariffs, industry and government sources say, after New Delhi’s move to increase customs duties on dozens of products to help its flagship Make-in-India drive aggravated differences over trade.
Ford, which has two plants in India, has sought a reversal of the new tariffs on auto components, while Apple Inc is concerned its iPhones have become even more expensive in the price-conscious $10-billion smartphone market.
India and the United States have built close political ties. But trade friction is casting a shadow. A US State Department spokesperson in Washington said that India should lower trade barriers, which were holding back economic ties.
India announced higher import tax on electronics products such as mobile phones and television sets in December, and then on 40 more items in the budget this month. These included goods as varied as sunglasses, juices and auto components.
India says the move is aimed at giving local industry the chance to grow and is part of a broader plan to lift the share manufacturing makes up of GDP to a quarter, from around 15 percent, and create the tens of thousands of jobs needed for a young workforce.
The Indian commerce ministry did not respond to a request for a comment on the US criticism of the import taxes. But a senior finance ministry official defended the decision to raise duties, saying it reflected a trend in other parts of the world, reported The Asian Age.