20% retaliatory duty removal on American apple imports to have 'zero' impact on Indian farmers: official

New Delhi: The decision to remove 20 per cent retaliatory customs duty on imported American apples will have a "zero" impact on Indian farmers as the government has sufficient policy space to support growers if there is any implication of the move, a senior government official said on Monday.

Additional Secretary in the Department of Commerce Peeyush Kumar said that India is not giving anything "extra" by removing this duty and it was not that "we have opened a floodgate" for American apples.

In fact, it is a win-win deal for India as it restores market access for domestic steel and aluminium products in the American market, which was impacted due to the imposition of high duties by the US in 2018.

The decision to remove these additional duties was part of an agreement reached between India and the US, during the recent visit of Prime Minister Narendra Modi to Washington and New York. India and the US have also agreed to terminate six trade disputes at the World Trade Organisation (WTO).

These remarks assume significance as Congress leader Jairam Ramesh in a tweet alleged that Prime Minister Narendra Modi "wants Apple to invest (not investigate) in India. But does he even care for the apple growers of Himachal Pradesh? He has avenged his election loss in Himachal by slashing import duties on American apples. Never before has India seen a more petty PM!"

The PM wants Apple to invest (not investigate) in India. But does he even care for the apple growers of Himachal Pradesh?

He has avenged his election loss in Himachal by slashing import duties on American apples. Never before has India seen a more petty PM! pic.twitter.com/cvZgQchq6S

— Jairam Ramesh (@Jairam_Ramesh) June 25, 2023

India will remove these duties on eight US products including chickpeas, lentils and apples, which were imposed in 2019 in response to America's measure to increase tariffs on certain steel and aluminium products.

India imposed retaliatory duties on 28 US products. America imposed an import duty of 25 per cent on steel products and 10 per cent on certain aluminium products on grounds of national security.

"There would be zero impact on Indian farmers due to the duty removal" because the import duty on apples still is at 50 per cent, Kumar told PTI.

Now India is also getting greater market access for its steel and aluminium products in the US, "so it was not that, we are giving something extra," he said.

Import of apples from the US decreased sharply from USD 145 million (127,908 tonnes) in 2018-19 to only USD 5.27 million (4,486 tonnes) in 2022-23.

It indicates that the market share of the US apples was taken by other countries due to imposition of additional retaliatory duty on American apples, as the imports from countries other than the US increased from USD 160 million in 2018-19 to USD 290 million in 2022-23.

The US's import share in the import market segment was taken by countries like Turkey, Chile, New Zealand and Italy.

After the removal of additional duties on the US apples -- as a part of the resolution of a WTO dispute which would result in the restoration of market access for Indian steel and aluminum exports to the US -- would compete on level-playing field with other countries, while it does not result any additional negative impact on domestic apple producers.

Earlier the commerce ministry in May imposed MIP (minimum import price) of Rs 50 per kg on apples, except for Bhutan.

This MIP will be applicable on apples from the US as well as other countries (excluding Bhutan), which would prevent flooding and protect domestic growers from predatory pricing and poor-quality/ cheap imports.

"While Indian apple growers will continue to gain from the MFN duty and the MIP that was imposed for all countries except Bhutan, removal of additional duties for the US will result in competition in imports in the premium market segment ensuring better quality at better prices for consumers," another official said.

There is no reduction on MFN (most favoured nation) duty on apples, which is still applicable on all imported apples including on the US at 50 per cent.