US and India Reach Agreement to Lift Import Tariffs on US Apples

Published 2023년 6월 29일

After five years of retaliatory tariffs imposed by the Indian government, apples from the United States (US) have officially regained market access to India. The trade, which was worth USD 160 million in 2018 before the tariff imposition, is expected to revitalize Washington State's apple industry, which heavily relies on apple exports. The Indian apple market has been dominated by countries like Türkiye, Iran, and key European Union (EU) apple-exporting countries during the tariff imposition. However, the lifted imposition presents a significant opportunity for US growers to regain their position as one of the major apple suppliers to India.

US apple growers have reason to celebrate as India has lifted its retaliatory tariffs on American apples after a five-year ban. The announcement came during Indian Prime Minister Narendra Modi's visit to the White House on June 22. This decision marks the reopening of one of the largest apple markets in the world to US apple imports.

The retaliatory tariffs were initially imposed by India in 2019 in response to the US imposing tariffs on steel and aluminum imports from India back in 2018. These tariffs resulted in a 20% tax increase on US apples, causing significant losses for the apple industry, particularly in Washington State, which heavily relies on apple exports. The supplementary duty ramped up the total tariff on US apples to 70% versus 50% for all competing supply origins.

Before the tariffs, India was the second-largest export market for US apples, with Washington State alone exporting 140 thousand mt of apples worth USD 160 million to India in 2018. However, the tariffs led to a steep decline in exports, with only USD 3 million worth of apples exported in 2022. This decline in exports severely impacted the industry, affecting over 68 thousand jobs in Washington State. On average, 30% of the apples, cherries, and pears produced in the Pacific Northwest are exported, with India being Washington State's second-largest export market prior to the implementation of retaliatory tariffs.

The removal of the tariffs is part of a bilateral agreement between the US and India to resolve six World Trade Organization disputes. Along with apples, India has also agreed to lift retaliatory tariffs on other key US agricultural imports, including almonds and walnuts.

Source: Tridge

This development is expected to revitalize Washington State's apple industry and provide a much-needed boost to local growers. It puts the industry back on an equal footing with competitors in the Indian market, which had been dominated by countries like Turkey, Iran, and key EU apple-exporting countries during the ban. The restoration of access to the Indian market, with its growing population, presents a significant opportunity for US growers to regain their position as one of the major apple suppliers to India.

The removal of Section 232 tariffs on US apple exports to India is seen as a positive step that will help restore export volumes to previous levels and support the apple industry's recovery. Washington state growers are optimistic about reclaiming their market share in India and rebuilding their export volumes.

Overall, India's lifting of retaliatory tariffs on US apples marks a significant achievement for the apple industry. It not only reopens a crucial market but also provides hope for future growth and increased opportunities for US apple growers. With this barrier removed, the industry can now focus on expanding its presence and catering to the demand in the world's most populous nation.