Removal of retaliatory import duties on US apples will not negatively impact domestic apple producers

With the decision to the resolution of six outstanding World Trade Organization (WTO) disputes between the US and India through mutually agreed solutions as jointly communicated during the official state visit of the Prime Minister to the USA, India will remove additional duties on eight US products, including apples, leading to restoration of market access for Indian steel and aluminum exports to the US.

The decision will not negatively impact domestic apple producers and will result in competition in the premium market segment ensuring better quality at better prices for consumers.

After the removal of this duty, the apples from the US would compete on a level playing field with other countries.

The decision will ensure that only premium quality apples can be imported for a specific market segment and 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 aluminum products. There is no reduction in 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.

Other countries took the market share of the US apples 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 US market share.

Further, on 8 May 2023, DGFT, vide notification 5/ 2023, made an amendment in import policy for Apples under ITC (HS) 08081000 by applying MIP (Minimum Import Price) of Rs 50 per Kg for all countries except Bhutan. Therefore, this MIP will also apply to apples from the US and other countries (excluding Bhutan), thus preventing flooding and protecting domestic growers from predatory pricing.

After applying 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.