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India proposes to raise customs duty on 30 US products

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India has now submitted a revised list of 30 items — including motorcycle, certain iron and steel goods, boric acid and lentils — to the WTO on which it proposes to raise customs duty by up to 50 per cent.

As duties hiked by the US on certain steel and aluminium products would have implications of about $241 million on India, the rise in tariffs proposed by New Delhi too would have an equal implication on America.

“The US would be collecting $241 million worth of duties by hiking tariffs on certain steel and aluminium items from India, we also proposed to withdraw concessions of the similar amount from these 30 products imported by India from the US,” a source said.

Earlier in May, India proposed to raise duties by up to 100 per cent on 20 products such as almonds, apple and specific motorcycles imported from the US.

The additional duty proposed to be hiked on these items ranges from 10 per cent to 100 per cent.

“The revision is being provided to adjust the products and the tariff rates in accordance with India’s rights reserved vide its notification to the Council for Trade in Goods contained in the WTO document…of May 18, 2018.

“India hereby reiterates its decision to suspend concessions or other obligations notified to the Council for Trade in Goods on May 18, 2018…of the General Agreement on Tariffs and Trade 1994 and Article 8.2 of the Agreement on Safeguards, that are substantially equivalent to the amount of trade affected by the measures imposed by the United States,” according to a communication by India to WTO.

It said that the proposed suspension of concessions or other obligations takes the form of an increase in tariffs on selected products originating in the US, based on the measures of America.

“India reserves its right to further suspend substantially equivalent concessions and other obligations based on the trade impact resulting from the application of the measures of the US,” it added.

The country has proposed this move under the WTO Agreement on Safeguards.

On March 9, US President Donald Trump imposed heavy tariffs on imported steel and aluminium items, a move that has sparked fears of a global trade war.

Trump signed two proclamations that levied a 25 per cent tariff on steel and a 10 per cent tariff on aluminium imported from all countries except Canada and Mexico.

Earlier India had stated that these suspensions will come into effect earlier than June 21, 2018, in case the US decides to continue the period of application of the measures.

It said that the duty imposed by America has affected steel exports by $198.6 million, while the same on aluminium was $42.4 million.

The other items include chickpeas, fresh apple, walnut, refined palmolein, motorcycle with engine capacity over 800 cc, diagnostic reagents and threaded nuts.

India has also dragged the US to the World Trade Organisations dispute settlement mechanism over the imposition of import duties on steel and aluminium.

India’s exports of steel and aluminium products to America stood at about $1.5 billion every year. Its exports to the US in 2016-17 stood at $42.21 billion, while imports were $22.3 billion.

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Most Asian markets rise as investors weigh China-US trade row

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Asia

Hong Kong | Asian markets mostly rose Monday but investors were keeping a close eye on the China-US trade row after Donald Trump’s optimistic comments on a possible deal were offset by a war of words between his vice president and Xi Jinping.

The mood across the region was a little calmer at the start of the week, providing some much-needed support after the volatility of seven days ago, with oil stabilising and the Federal Reserve tempering fears about its plans for interest rate hikes. US markets provided a positive lead after Trump said Friday that Beijing had made overtures toward resolving their trade war, meaning he might hold off imposing another round of tariffs.

The president’s comments followed an indication from one of his top economics advisers that talks were under way ahead of a planned meeting at the G20 in Argentina at the end of this month.

However, hopes for an early agreement were jolted by a spat at the weekend APEC meeting between Mike Pence and Xi over China’s economic and regional ambitions, with the US vice-president mocking Beijing’s “constricting belt” and a “one-way road” initiative. Xi defended his scheme and hit out at Trump’s “America First” protectionist agenda, saying it was a “short-sighted approach” that was “doomed to failure”.

The stark differences between the two sides meant the APEC gathering ended without a final communique for the first time in its history. Still, investors in Asia were in a buying mood Monday as they picked up bargains.

In early trade Hong Kong was up 0.5 percent and Shanghai added 0.4 percent while Tokyo ended the morning 0.4 percent higher. Seoul gained 0.3 percent and Taipei added 0.1 percent with Manila jumping more than one percent.

However, Sydney dropped 0.6 percent, Singapore was off 0.4 percent and Wellington eased 0.2 percent. There was also some support from comments by top Fed officials last week hinting at concerns about the global economic outlook, indicating they see signs of slowing that could affect their plans for raising borrowing costs.

Expectations the US central bank would press ahead with a series of hikes well into next year, making debts more expensive for investors, have helped send global markets down this year. But while the prospect of slower rate hikes would be cause for celebration, Stephen Innes, head of Asia-Pacific trade at OANDA, sounded a note of caution.

“A Fed pause during a hiking cycle is a very strong ‘canary in a coal mine’ type of signal and could eventually lead a more profound correction lower in US equity markets if the US economy does sputter,” he said. Oil prices rose more than one percent, extending gains from the end of last week after major producer Saudi Arabia said it plans to cut output and called on other producers to follow suit.

“Hope is building on OPEC Plus (countries) to curb output as oil prices have entered into a bear market, falling over 20 percent from the peak in early October when Brent was at USD 86 per barrel,” Margaret Yang Yan, market analyst at CMC Markets Singapore.

However, the commodity remains under pressure from concerns about global demand and rising output as well as the China-US trade war. On currency markets the pound managed to hold off falling further as attention turns to British Prime Minister Theresa May’s attempts to win over enough members of her party to push through her Brexit deal.

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Rupee sheds 9 paise against US dollar at 72.02

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Rupee

Mumbai | The rupee depreciated by 9 paise to 72.02 against the US dollar in early trade Monday at the interbank foreign exchange, halting its four-day winning streak, ahead of RBI’s board meet. Fresh demand for the American currency from importers amid rise in crude prices weighed on the domestic unit, dealers said.

However, weakness in the US dollar against some currencies in global market and a higher opening of the domestic equity markets limited the rupee fall ahead of Reserve Bank of India’s board meet, dealers said. Finance Ministry nominees and some independent directors are expected to take on Governor Urjit Patel and his team later in the day over issues ranging from micro, small and medium enterprises (MSME) credit to the central bank’s reserves, though both sides are in favour of reaching a common ground.

Meanwhile, the international benchmark, Brent crude was trading higher by 0.72 per cent to USD 67.40 per barrel. The rupee on Friday strengthened by 4 paise to close at a fresh two-month high 71.93 against the US currency, despite a rebound in oil prices and a stronger dollar.

Foreign institutional investors (FIIs) bought shares worth Rs 844.82 crore on Friday, as per provisional data. The benchmark BSE Sensex was trading 159.66 points, or 0.45 per cent, higher at 35,616.82 in opening trade.

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Sensex rises over 150 points ahead of RBI board meet

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Sensex

Mumbai | The benchmark BSE Sensex surged over 150 points and the broader NSE Nifty went past the 10,700 mark in opening trade Monday on the back of widespread gains ahead of the Reserve Bank of India’s board meet amid capital inflows by foreign funds. Positive leads from other Asian markets too influenced sentiments here.

The 30-share index was trading 190.81 points, or 0.54 percent, higher at 35,647.61 points. Sectoral indices, led by realty, metal, auto, IT indices and bankex, advanced up to 1.44 percent. The barometer had gained 315.17 points in the previous two sessions.

Similarly, the NSE Nifty was up 43.10 points, or 0.40 percent, at 10,725.30 points. Investors are awaiting cues from the Reserve Bank of India’s board meet later in the day.

Finance Ministry nominees and some independent directors are expected to take on Governor Urjit Patel and his team later in the day over issues ranging from micro, small and medium enterprises (MSME) credit to the central bank’s reserves, though both sides are in favour of reaching a common ground.

Brokers said besides capital inflows from foreign funds, positive cues from other Asian markets, tracking weekend gains at Wall Street after US President Donald Trump said that he may not impose more tariffs on Chinese goods after Beijing sent a list of measures it was willing to take resolve trade tensions, buoyed the sentiment.

Major gainers were Yes Bank, Infosys, M&M, Hero MotoCorp, RIL, HDFC Bank, HDFC, Sun Pharma, Maruti Suzuki, Tata Steel, Wipro, L&T, Vedanta, TCS, ICICI Bank, Coal India, ITC, PowerGrid, HUL and Bajaj Auto, gaining up to 4.29 percent. Top losers include Bharti Airtel, Axis Bank, Wipro, Asian Paints, ICICI Bank and Adani Ports, falling up to 1.30 percent.

Meanwhile, foreign institutional investors (FIIs) bought shares worth Rs 844.82 crore on Friday, while domestic institutional investors (DIIs) sold shares worth Rs 372.24 crore, provisional data showed. Elsewhere in Asia, Japan’s Nikkei rose 0.50 percent, Korea’s KOSPI gained 0.21 percent, Shanghai Composite Index up 0.22 percent and Hong Kong’s Hang Seng edged higher by 0.24 percent. The US Dow Jones Industrial Average ended 0.49 percent higher on Friday.

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