Why in News: 

• U.S. is India’s largest export destination, India is only the 13th largest for the U.S. due to “overly restrictive market access barriers.Tariff and non-tariff barriers, multiple regulations put foreign firms at disadvantage

Details:

• India is already the world’s third largest economy, and by 2030, it will become the world’s largest consumer market because of the     rapid     growth      of      the      middle      class,  India is only the U.S.’s 13th largest export market, due to overly restrictive market access barriers,”
• Meanwhile, the U.S. is India’s largest export market, accounting for something like 20% of the total. There is a real imbalance.”
• while American technology and expertise can play an important role to meet India’s
• developmental needs, U.S. companies faced significant market access barriers in India. These include both tariff and non-tariff barriers, as well as multiple practices and regulations that disadvantage foreign companies,”
• India’s average applied tariff rate of 13.8%, and that remains the highest of any major world economy
• goal is to eliminate barriers to U.S. companies, operating here, including data-localisation restrictions that actually weaken data security and increase the cost of doing business,

Price controls’

• “Other obstacles include price controls on medical devices and pharmaceuticals, and
• restrictive tariffs on electronics and telecommunications products
• U.S. would not be able to sell oil to India at lower rates because oil is owned by private players and the U.S. government would not be able to force them to offer concessionary rates.

Tariff or customs duty

• A tariff or customs duty is a financial charge in the form of a tax, imposed at the border on goods going from one customs territory to another.
• Tariffs applied to imports are usually collected by customs officials of the importing country when goods are cleared through customs for domestic consumption.
• Tariffs can also be imposed on exports also but the import tariffs are the most common type of tariffs and have been the main focus of attention of GATT/WTO negotiations.

Impact of Tariffs

• There are two main purpose of imposing tariffs by the Governments. To protect their domestic industries from the competition of imports. To collect revenue.