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Donald Trump to remove India from the list of beneficiary countries of trade preference deal, India says won’t hit exports

On Monday, the Trump government informed US congress of its intent to take out India from a list of beneficiary nations of a zero-import duty series, called the Generalized System of Preference (GSP), for not allowing American producers “reasonable access” to its markets.

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India has been the top beneficiary of this curriculum that outspreads zero-tariff command for certain goods, not all, to 120 nations. It traded an assessed $5.6 billion worth of goods to the US under this structure in the year 2017, which is more than 11% of the total value of it exports to the United States that is $48.6 billion, because of which it matters.

President Donald Trump wrote in a letter to the heads of the House of Representatives and the Senate which stated, “I am providing notice of my intent to terminate the designation of India as a beneficiary developing country under the Generalized System of Preferences (GSP) program.”

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The president also added that he had “determined that India has not assured the United States that it will provide equitable and reasonable access to the markets of India”.

On the other hand in New Delhi, India’s commerce secretary Anup Wadhawan said the US pronouncement to remove India’s name from the GSP list won’t have any “significant impact” on the 5.6 billion dollar trades to the US. The news agency quoted Wadhawan as saying “India exports goods worth USD 5.6 billion under the GSP, and the duty benefit is only USD 190 million annually.”

Trump’s letter strike out off a 60-day notice time period, which is principally the time India has to make effort and converse the decision.

Below is the list of items that are affected by Trump’s annoucement:

GSP1
GSP2

GSP3
GSP4
Source: Ministry of Commerce and Industry, Government of India

If India declines to produce, hundreds of sorts of merchandises it exports to the United States under the GSP will at the present be lay open to to rates that amount to about $190 million in import duty, as per to people dealing with mutual trade among the nations and the contentious and long-drawn-out negotiations in progress for months.

The pronouncement was along projected lines but New Delhi was equally dissatisfied and annoyed. An official close to the negotiations said, “We had conceded most of their demands and had indicated our readiness to discuss the few remaining ones as well,” he further added, “but they seemed to be in the mood to go for all”.

US authorities and witnesses of associations with Indian were dissatisfied as well, mostly, as they saw it, for the reason that of the government’s failure to see the trade matter in the perspective of its own national security strategy purposes for Asia, with warnings from China as a communal objective.

Milan Vaishnav, a South Asia expert at Carnegie, a leading think-tank, defined the delisting as a very ill-considered decision by the Trump government.

He said, “Yes, the United States has economic grievances with India. And yes, India has instituted several new protectionist measures. In my view, however, the United States should be taking the long view. If it chooses not to, then I think the entire edifice of the Indo-Pacific strategy rings hollow.”

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