This article tells about India to lose preferential trade terms with the U.S. Well, US has terminated India's designation as a beneficiary developing nation under the key GSP trade programme after determining that it has not assured the US that it will provide "equitable and reasonable access" to its markets.
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Generalized System of Preference (GSP) · The Generalized System of Preference (GSP) is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries. · India was the largest beneficiary of the programme in 2017 with $5.7 billion in imports to the US given duty-free status and Turkey the fifth largest with $1.7 billion in covered imports, according to a Congressional Research Service report issued in January. · The GSP criteria include, among others, respecting arbitral awards in favour of the US citizens or corporations, combating child labour, respecting internationally recognised worker rights, providing adequate and effective intellectual property protection, and providing the US with equitable and reasonable market access. · Under the GSP programme, nearly 2,000 products including auto components and textile materials can enter the US duty-free if the beneficiary developing countries meet the eligibility criteria established by Congress.
Trade irritants between India and the US A number of trade irritants have rankled the bilateral relationship. The U.S. has had concerns over
- On March 4, Trump announced that the US intends to terminate India's designations as a beneficiary developing country under the GSP programme. The 60-day notice period ended on May 3.
- The US argues that India has failed to assure America that it will provide equitable and reasonable access to its markets in numerous sectors. Meanwhile, India had said that the US government's move to withdraw duty concessions on certain products under the GSP programme will not have a significant impact on exports to America as the benefits were only about USD 190 million annually.
India has had concerns over
- Access to India’s dairy and medical devices market
- Indian tariffs in ICT have been an issue for the U.S.
- India’s policies on data localisation
- FDI in India’s e-commerce space
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- Being placed on a list of countries whose aluminium and steel were taxed by the U.S. in 2018
- S. tightening of policies around the H1B skilled worker visa program.