India to lose preferential trade terms with U.S.

Prelims level : International Mains level : Governance, Constitution, Polity, Social Justice and International Relations
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Why in news

  • India will lose access to preferential trade terms with the U.S. under the latter’s Generalised System of Preferences (GSP) programme.


  • Trump had written to the U.S. Congress on stating his intention to withdraw GSP benefits for India, saying India had failed to assure Washington that it would provide “equitable and reasonable access to the markets of India”.
  • GSP can and is expected to be terminated via a Presidential proclamation. Indian exports to the U.S. worth $5.6 billion are covered by GSP, although India gets only $190 million in tariff savings. Nevertheless, the programme impacts crucial Indian sectors including textiles, leather, engineering goods, gems and jewellery.



  • Generalized System of Preferences (GSP) is an umbrella that comprises the bulk of preferential schemes granted by industrialized nations to developing countries.
  • It involves reduced Most Favored Nations (MFN) Tariffs or duty-free entry of eligible products exported by beneficiary countries to the markets of donor countries.
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