The United States has given indications that it would consider a reduction in the tariff from its 25 percent additional levy on steel with an assurance from India that it would lower the volume of its supplies of the metal.
The development has come at a critical point as any further delays in the tariff deliberations would lead to further escalation in the trade war which is already sending shock waves across world markets.
Perhaps, India has already notified the plan to introduce a retaliatory tariff of worth $235 million against 29 American products from August first week.
The Financial Express reported that the officials from both the countries met last week in Washington to deliberate a 'trade package' in which all the concerns are addressed. One of the major decisions of the Donald Trump administration was to levy extra duties on steel and aluminium (10 percent) from India.
The Indian side is now working on a proposal to calculate if the lower volume of steel exports, with exemption from the additional tariffs, serves its interest better. The Trump administration is yet to decide on a threshold for the steel import as they have requested the Indian counterparts to submit a proposal which could be considered by world's largest economy.
The entire world is feeling the repercussions of a trade war started by the Trump administration. Markets across the world continue to tumble amid the introduction of levies on the imports. China is witnessing a slowdown in its economy as due to additional tariffs introduced by the US.
The major economies are bracing themselves by breaking out a free trade deal to save themselves from the ghosts of "de-globalisation".
In June, India had submitted its retaliatory plan to the World Trade Organization (WTO) after its proposal to exempt extra tariff on the US imports was rejected.
India has levied retaliatory duties on a series of American imports – the tariff on American apples will be increased by 25 percent and almonds by 20 percent. India has introduced an additional tariff of 10 percent on diagnostic reagent and binders for foundry moulds, 15 percent on certain steel products, 10 percent select pulses and 15 percent on phosphoric acid.
