India on Monday said it will hike the tariffs on many of its goods and services to compensate for the US trade sanctions that have hit the country’s manufacturing sector and hurt the exporters.
The announcement comes amid intensifying pressure from Washington on India over the countrys failure to reduce the pollution levels in its biggest cities and its failure to implement measures to clean up its power sector.
Indian authorities have announced that they will hike tariff on some of the goods that are widely used in India, such as household items and medicines, to compensate the US.
“We will continue to raise tariffs on these goods and the price of these goods will be higher,” the ministry of finance said in a statement.
India’s economy is the biggest in the world and exports more than half of its total goods.
Prime Minister Narendra Modi has pledged to increase the tariffs imposed on the country from 10 per cent to 25 per cent this year, while he has promised to increase them on most other goods by 20 per cent.
US President Donald Trump has warned that any country that continues to allow the US to impose trade sanctions will be targeted by the US Treasury Department.
Last week, India said it would not be able to meet the US’s demands on its electricity tariff because of the US sanctions.
It had said that it was working to make the tariffs “more competitive” and said it had received assurances from the US that the tariffs would be raised soon.
In an effort to ease the pressure on India, US Treasury Secretary Steven Mnuchin earlier this month urged India to stop “excessive” import duties on the goods.