Published On: Sun, Jun 2nd, 2019

America has taken back the status of India as a state of preferential status-GSP.

  • US President Donald Trump has abolished the status of a beneficiary developing country under the GSP trade program.
  • India gets this exemption under the US Generalized System of Preference program
  • US plea – Too much duty on US products in India, not eligible for GSP
  • India said – America’s decision will not have much effect, we will continue the dialogue

Washington: The US has said that it will withdraw the status of beneficiary of the Generalized System of Preference (GSP) program from India and Turkey. US President Donald Trump gave this information to the parliament there on Monday. According to US law, this change will be applicable 2 months after the notification is issued. The countries involved in the GSP program of America are given special preference. The US does not charge a fixed amount of imports from those countries.

America has taken back the status of India as a state of preferential status-GSP.

America has taken back the status of India as a state of preferential status-GSP.

What will be its effect on India?

There is no import duty in the US on products from developing countries that are beneficiaries of the US GSP program. Under this, India gets a discount on exports of $ 5.6 billion (Rs 40,000 crore). India will not get this benefit when out of GSP. India is the largest beneficiary of GSP.

What is America’s plea?

Trump says that he has not received confidence from India that he will give an equal discount to American products in his market. The United States says that due to restrictions in India, it is suffering commercial losses. It has failed to meet the GSP criteria. The US began reviewing the conditions set for GSP in April last year.

India said – will not have much effect

Commerce Secretary Anoop Wadhawan has said that our relationship with America is strong. We are in talks on trade related issues. But in the case of medical devices will not compromise. The economic value of the benefits of GSP is not very high. We will continue to negotiate with the US.

Trump also threatened last week

The US President had said that the import duty in India is very high. India charges 100% tariff on a bike going from the US, while the US does not charge any tax on similar goods coming from there. He said that we will also impose equal tariffs on Indian imports.

For Turkey, the US has argued that its (Turkish) economy has grown significantly in the nearly four and a half decades since joining the GSP. There poverty has come down and gross national income (GSP) has also increased.

Import duty too high in India: US

The US President had said that the import duty in India is very high. India charges 100% tariff on a bike (Harley Davidson) going from the US, while the US does not charge any tax on similar goods coming from there. He said that we will also impose equal tariffs on Indian imports. The United States says that due to restrictions in India, it is suffering commercial losses. It has failed to meet the GSP criteria.