U.S. President Donald Trump terminates preferential trade status for India under GSP
02, Jun 2019
Prelims level : Mains level :
- India’s access to preferential trade terms under the U.S.’s Generalized System of Preferences (GSP) was on its way out, U.S. President Donald Trump issued a proclamation ending the trade benefits effective June 5.
- However, benefits could possibly be reinstated subject to India and the U.S. reaching an agreement, according to a senior State Department official.
- The GSP is a programme that seeks to aid developing countries by giving some of their products non-reciprocal, duty free access to U.S. markets. In 2018, some $ 6.3 billion of Indian merchandise exports to the U.S. were covered by GSP, as per the Congressional Research Service.
- This represented 11% of all merchandise from India.
- India was the largest beneficiary of the programme, accounting for over one quarter of all the U.S.’s GSP-covered imports.
- The U.S. Trade Representative (USTR) began a review of India’s eligibility for GSP in April 2018.
- The U.S. medical devices and dairy industries had made representations on market access issues in India. Tariffs in the ICT sector had also become an irritant in ties.