Will US apples taste sour to domestic producers in India?

New Delhi: India will remove additional duties on eight United States products, including apples, that would lead to the restoration of market access for Indian steel and aluminium exports to the US.

The decision to a resolution of six outstanding World Trade Organisation (WTO) disputes between the US and India through mutually agreed solutions was jointly communicated during the official state visit of Indian Prime Minister Narendra Modi to the USA.

Following the resolution, the Indian Ministry of Commerce and Industry, today clarified that the removal of additional retaliatory duties for the import of US apples will not result in any negative impact on domestic apple producers. It claimed that after the removal of this duty, the apples from the US would compete on a level playing field with other countries.

“The decision will not result in any negative impact on domestic apple producers and will result in competition in the premium market segment ensuring better quality at better prices for consumers,” the Ministry stated, adding that the decision will ensure that only premium quality apples could be imported for which there exists a specific market segment and specific demand.

An additional 20% duty was imposed on US apples in 2019 in response to USA’s measure to increase tariffs on certain steel and aluminium products. There is no reduction on Most Favoured Nation (MFN) duty on apples which is still applicable on all imported apples including in the USA at 50%.

The import of apples from the world has been stable in the range of US$ 239 – 305 million (except in 2021-22 when it was US$ 385 million) in the last five financial years since the application of these additional duties on US apples. The import of apples from the USA has decreased from US$ 145 million (127,908 Ton) in FY 2018-19 to only US$ 5.27 million (4,486 Ton) in FY 2022-23.

The market share of the US apples was taken by other countries due to the imposition of additional retaliatory duty on US apples. This is reflected as the import of apples from countries other than the US increased from US$ 160 million in FY 2018-19 to US$ 290 million in FY 2022-23. Turkey, Italy, Chile, Iran and New Zealand are other top exporters to India of apples which took the market share of the US.

Further, on May 8, 2023, DGFT vide notification 5/ 2023 made an amendment to the import policy for Apples by applying MIP (Minimum Import Price) of Rs 50 per Kg for all countries except Bhutan. Therefore, this MIP will also be applicable to apples from the US as well as other countries (excluding Bhutan), “thus preventing any flooding and protecting domestic growers from predatory pricing”.

After the application of additional duty on US apples, its share in the premium market segment was taken by countries like Turkey, Brazil, New Zealand, Italy, etc. as mentioned above, the Ministry stated.

Data pertaining to Apple import is given below:

India’s Apple Import from USA (Values in US$ Million &Quantity in Thousand KGS)

Source: DGCI&S Kolkata

– global bihari bureau