US President Donald Trump to 'end' India’s preferential trade treatment

Trump plans to end India's preferential trade treatment

"While they have initiated this, there are still 60 days left". "It's meant for least-developed countries, and India has graduated out of that".

The issue was also discussed during the India-US Commercial Dialogue, held over video conference on 13 and 14 February between India's Commerce and Industry Minister Suresh Prabhu and US Commerce Secretary Wilbur Ross.

In a letter to Congress, Trump notified US lawmakers of his "intent to terminate the designation of India as a beneficiary developing country under the Generalized System of Preferences (GSP) program".

The Centre is clearly putting up a courageous front in the election year.

Delhi has played down the significance of no longer being party to the GSP with commerce secretary Anup Wadhawan saying it "will not have a significant impact".

Turkey has said the decision to remove it from the GSP would hurt American small- and medium-size enterprises and manufacturers, slamming the decision by the United States.

India's price controls on drugs and medical devices such as cardiac stents - and India's intellectual property policies - is another big source of friction, as are New Delhi's volatile restrictions on agricultural commodity imports.

"GoI has to be conscious of our developmental and public welfare interests".

About $ 5.6 billion worth of Indian exports to the U.S. benefit from the duty-free channel that the Generalised System of Preferences (GSP) offers.

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The leading GSP import categories were vehicles and vehicle parts, jewelry and precious metals, and stone articles, the website said. Notably, India exports worth $5.6 billion that enter the United States duty-free. These benefits are real and tangible.

In October 2018, the Trump administration announced the withdrawal of GSP benefits covering $70 million across 94 product categories. In 2017, GSP saved American companies $894 million in saved taxes.

Mukherjee said India disagrees over the market access issue, but has outgrown GSP.

As many as 3,700 products get GSP benefits but India export only 1,900 items such as chemicals and engineering under that concession which was introduced in 1976 by America. "Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion".

"Pursuant to the notification, the duty benefits would be under threat for about 2,000 products ranging from automotive components, industrial valves and textile materials etc".

Ashok Bhattacharya, former editor of India's Business Standard newspaper, told DW that the U.S. move was a "politically nuanced lesson the USA has given to India" but was unlikely to have a major political impact. While the USA had been hinting at such a move for months, he said, "many thought it was a negotiating tactic".

Mr. Wadhawan added that India was still in talks with the US on the higher import duties that the country charges on steel and aluminium, and said that India was still reviewing whether it would impose retaliatory tariffs or not.

And not just the government, but different trade bodies and analysts have also felt that the impact would be "marginal" or "negligible".

Turkey was designated as a program beneficiary in 1975, and the trade representative's office pointed to a number of advancing economic metrics in establishing its determination.

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