IAS Gyan

Daily News Analysis


15th June, 2019

India to impose retaliatory tariffs on 29 American goods


Topic Important for: General Studies- 3 I International relations- Bilateral, regional and global groupings.




The government of India has imposed retaliatory tariffs on the imports goods from U.S.




  • The U.S has imposed higher import tariffs on Indian aluminium and steel.


  • India has repeatedly asked for exemption from these higher tariffs but received positive response from U.S.


  • The U.S. had announced its decision to withdraw the preferential duty benefits to India in March.


  • The U.S. had withdrawn duty-free benefits for Indian exports under its Generalized System of Preferences (GSP) effective from 5 June.




  • India has decided to impose retaliatory tariffs on 29 goods imported from the U.S, the decision will be implemented from June 16 onwards.


  • After extending the deadline for several times, India has decided to impose additional customs duties on 29 US products, including almond, walnut and pulses.


  • Move comes after a year of talks between India and U.S on trade barriers to Indian steel, aluminium.

  • According to the Trade Promotion Council of India (TPCI), the impact of the retaliatory tariffs imposed by India on the U.S. would amount to about $290 million


  • India has also dragged the US to the World Trade Organisation's (WTO) dispute settlement mechanism over the imposition of import duties on steel and aluminium.


  • Last year, the U.S. announced that it would review India’s eligibility for the GSP.  It announced the withdrawal of benefits earlier this month.


The Generalized System of Preferences

The Generalized System of Preferences (GSP) is a U.S. trade program designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 4,800 products from 129 designated beneficiary countries and territories.


The objective of GSP:


  • To give development support to poor countries by promoting exports from them into the developed countries.
  • It promotes sustainable development in beneficiary countries by helping these countries to increase and diversify their trade with the United States.
  • The GSP provide opportunities for many of the world’s poorest countries to use trade to grow their economies and climb out of poverty


What is the impact of GSP withdrawal on India?


  • India is the 11th largest trade surplus country for the US.
  • India exports nearly 50 products of the 94 products on which GSP benefits are stopped.
  • The GSP removal will leave a reasonable impact on India as the country enjoyed preferential tariff on exports worth of nearly $ 5. 6 billion
  • The removal of GSP indicates a tough trade position by the US, especially for countries like India who benefited much from the scheme.  

Benefits of Generalized System of Preference


  • Company Competitiveness is boosted by GSP as it reduces costs of imported inputs used by companies to manufacture goods
  • Economic growth and development in the developing world by helping beneficiary countries to increase and diversify their trade with the developed nations.
  • GSP promotes Global values by supporting beneficiary countries in affording worker rights to their people, enforcing intellectual property rights, and supporting the rule of law.


Indian - U.S. Exports


  • India exports steel and aluminium products worth about $1.5 billion to the US every year.


  • India's exports to the US in 2017-18 stood at $47.9 billion, while imports were at $26.7 billion. The trade balance is in favour of India.

Head of 32,000-year-old wolf found in the Russian Arctic 


Topic Important for: General Studies- 3 I Bio diversity, Environment.




  • According to the scientist the wolf was preserved in permafrost has been found in the Russian Arctic
  • The animal is believed to have been between two and four years old when it died.
    A first intact head of a gigantic adult wolf which died about 32,000 years ago.
  • The head of wolf was found by a local on the banks of the Tirekhtyakh River in Russia’s remote Arctic region of Yakutia last summer.
  • It features a well-preserved brain, soft tissue and a set of powerful teeth and measures 41.5 cm in length
  • The head was handed to local palaeontologists who teamed up with scientists from the Jikei University School of Medicine in Tokyo to study it.
  • Research shows the animal died about 32,000 years ago in the Pleistocene epoch, when the most recent Ice Age occurred.
  • The wolf is believed to have been between two and four years old when it died
  • The Pleistocene epoch was the time when megafauna, such as woolly mammoths roamed the earth.

WPI inflation at 2-year low in May 




The wholesale price inflation is reported at was at 6.99%, down from 7.37%.




Wholesale price-based inflation hit a low of 2.45% in May on falling prices of food articles, fuel and power items.

The Wholesale Price Index (WPI)-based inflation:

  • 3.07% in April
  • 4.78% in May 2018


What is Wholesale Price Index (WPI)?


  • Wholesale Price Index (WPI) measures the average change in the prices of commodities for bulk sale at the level of early stage of transactions.
  • The index basket of the WPI covers commodities falling under the three major groups namely Primary Articles, Fuel and Power and Manufactured products. (The index basket of the present 2011-12 series


  • In India WPI is also known as the headline inflation rate.


  • In India, Office of Economic Advisor (OEA), Department of Industrial Policy and Promotion, Ministry of Commerce and Industry calculates the WPI.


The main uses of WPI are the following:


  • To provide estimates of inflation at the wholesale transaction level for the economy as a whole. This helps in timely intervention by the Government to check inflation in particular, in essential commodities, before the price increase spill over to retail prices.


  • WPI is used as deflator for many sectors of the economy including for estimating GDP by Central Statistical Organisation (CSO).


  • WPI is also used for indexation by users in business contracts.


  • Global investors also track WPI as one of the key macro indicators for their investment decisions.


What are the reasons:

This is clearly an indication of weakening of demand impulse in the economy.

The delayed and less than normal monsoon could aggravate the food inflation further in the coming months.


The government monitors the situation proactively, checks speculative activities, and intervenes in the market to stabilise prices.


The death of children was reported due to suspected Acute Encephalitis Syndrome (AES) in Bihar.


Topic Important for: General Studies- 2 I Issues relating to Health




  • According to the National Vector Borne Diseases Control Programme (NVBDCP), 10,485 AES cases were diagnosed in 2018 with 632 deaths across 17 states.


  • India records fatality rate at 6 per cent in AES, but the fatality rises to 25 per cent amongst children. Bihar, Assam, Jharkhand, Uttar Pradesh, Manipur, Meghalaya, Tamil Nadu, Karnataka, and Tripura are worst affected.


Acute Encephalitis Syndrome (AES)


  • AES affects central nervous system, mostly in children and young adults.


  • Symptoms: It starts with high fever, then hampers neurological functions causing mental disorientation, seizure, confusion, delirium, coma.




  • It can be caused by virus, bacteria, fungi
  • Japanese encephalitis (JE) virus is the most common cause of AES in India,