Why Apple Imports Will Continue to Attract 50% High Duties?
Following the imposition of a twenty-five per cent tax on steel imports and a ten per cent tax on aluminium imports by the Trump administration, India responded by imposing a 20% duty on apple imports from the US.
In a recent announcement, the government stated that imported apples would continue to be subject to a 50% import duty. This decision has been made to protect and promote domestic apple farmers, maintain a level playing field in the market, and ensure the sustainability of the domestic apple industry.
While the move may affect consumers and importers in the short term, the government believes it is necessary to safeguard local farmers’ interests and ensure the apple sector’s long-term growth.
As part of the agreement to resolve long-standing disputes at the World Trade Organisation, the government on Monday made it clear that the removal of additional duties on imports of apples from the US will not harm growers in India because the standard import tariff of 50% will still apply to such substances.
Following the imposition of additional taxes of twenty-five per cent on steel imports and 10% on aluminium imports by the Trump administration, India has decided to implement an extra 20% duty on imported apples from the US.
According to a statement, as part of the settlement of the WTO issues, India would eliminate extra taxes on eight US products, which will also restore market access for US steel and aluminium exports.
Apple imports have been discussed in many countries, including India. Recently, the demand for apples has increased significantly due to changing dietary preferences and rising consumer health consciousness. India, one of the largest apple-consuming nations globally, relies on domestic production and imports to meet this demand. However, the influx of imported apples has impacted the domestic apple industry, leading to concerns about the livelihoods of local farmers.
By maintaining a 50% import duty on apples, the government aims to shield domestic apple farmers from unfair competition from cheaper imported apples. Local farmers often face higher production costs due to labour, infrastructure, and climatic conditions. Without protective measures, the influx of cheap imports could lead to an imbalance in the market, causing financial distress for farmers and affecting their sustainability.
Import tariffs act as a tool to balance the market dynamics and prevent the dumping of cheap foreign produce. A high import duty encourages consumers to purchase locally grown apples, boosting demand for domestic produce and supporting the growth of the local apple industry. It also provides a level playing field for domestic farmers, ensuring they can compete fairly with imported apples.
Maintaining the import duty on apples aligns with the government’s long-term vision of achieving self-sufficiency in apple production. The government’s goal is to decrease dependence on imported apples and boost domestic apple farming by safeguarding and encouraging it. This approach will ensure food security and create employment opportunities in rural areas, driving economic growth.
The decision to continue the 50% import duty on apples may have short-term implications for consumers and importers. Imported apples will likely become more expensive, affecting their affordability and availability in the market. Importers must reassess their business strategies and factor in the increased costs to maintain competitiveness.
The government’s decision could also serve as a chance to encourage people to eat apples that are locally produced. With rising awareness about the benefits of supporting local industries and sustainable farming practices, consumers may actively seek domestic apples, further boosting demand and encouraging investment in the sector.
According to the statement, the most favoured nation tariff on apples, which is still in effect and is set at 50% for all imported apples, including those from the US, has remained the same.
Since increased levies were implemented, India’s apple imports have remained steady at $ 239-305 million over the previous five fiscal years. Only $5.27 million of apples were imported from the US in FY23, down from $145 million in FY19. Due to the implementation of higher levies, foreign nations have seized some of the US market shares for apples.
The government banned the import of apples from all nations other than Bhutan in May to safeguard apple producers. Imports from the US will also be subject to this requirement.
India slapped increased charges on imports of apples, among other items, as well as almonds, chickpeas, lentils, walnuts, boric acid, and diagnostic tools.
The government’s decision to maintain a 50% import duty on apples aims to protect and promote domestic apple farming, maintain a level playing field, and ensure the sector’s long-term sustainability. While it may have short-term implications for consumers and importers, the move is intended to foster self-sufficiency, boost employment, and create a vibrant domestic apple industry. By striking a balance between imports and domestic production, the government aims to secure the interests of local farmers and pave the way for a resilient and prosperous apple sector in the country.
