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India cuts average import tariff to 11% from 13% - govt

official

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Import tariffs cut on nearly 30 items in annual budget

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Trade analyst says India's effective tariffs remain high

(Adds analyst comment; paragraphs 6-10)

By Nikunj Ohri and Manoj Kumar

NEW DELHI, Feb 3 (Reuters) - India does not want to give

any signal that it is protectionist, the top bureaucrat in the

finance ministry said, after slashing import duties on high-end

motorcycles, amid U.S. President Donald Trump's moves on

tariffs.

Sunday's remarks came a day after Trump ignited a trade war

with sweeping tariffs on Canada, Mexico and China. None were

aimed at India, although Trump had called it a tariff abuser

during his election campaign last year.

"We don't want to give anybody any signal that we would like

to be protectionist," Finance Secretary Tuhin Kanta Pandey told

Reuters in an interview after the budget, unveiled on Saturday.

"Our stance is that we don't want to increase protection."

Trade and immigration issues will take centrestage when

Prime Minister Narendra Modi meets this month with Trump, whose

administration India has sought to placate after his accusations

that its tariffs hurt prospects for American firms.

India's budget cut import tariff slabs, reducing average

basic customs duties on scores of items such as raw materials

for domestic industries like textiles and automobiles, Pandey

added.

Average import tariffs on essential goods, mainly items

of food and raw material, range from zero to 5%, while those on

capital goods range from 7.5% to 10%, with about 10 items in

higher tax categories, he said.

Trade analysts were not convinced the cuts were

sufficient, however.

"India's average tariffs are still much higher compared

to the United States, Japan and China," said Ajay Srivastava,

founder of Global Trade Research Initiative, a think tank based

in Delhi.

While India was slashing peak rates of basic customs

duties used for international comparisons, it was adding

various surcharges on imports, implying that the total tax

burden remained high, he said.

Trump's administration has upped the ante by recently

raising the issue of undocumented Indians living in the United

States, a topic on which India's foreign ministry has said it is

in dialogue with U.S. authorities.

India slashed custom duties on motorcycles, such as those

from Harley-Davidson ( HOG ), with engine capacity of 1,600 cc or more,

to 30% from 50% on fully-built imports in the budget, which

Pandey said also cut average tariffs to 11% from 13%.

"We should give the right signal for the world, as well as

to our own industry," Pandey added, saying the tariff measures

aimed at helping domestic companies initially but would be

phased out as those industries developed.