India yesterday termed “unfortunate” the US decision to withdraw generalised system of preference (GSP), a day after the Trump administration announced to end the preferential trade treatment to Indian exporters from June 5.
Reacting to the US decision, the Indian commerce ministry said in a statement that the GSP is unilateral, non-reciprocal and non-discriminatory benefits extended by some developed countries to developing countries.
The GSP withdrawal by the US is expected to impact the export of 1,900 items from India at a time when India’s overall merchandise exports are flagging and the trade deficit widening.
India, as part of bilateral trade discussions with the US, had offered resolution on significant American requests in an effort to find a mutually acceptable way forward, the statement said.
“It is unfortunate that this did not find acceptance by the US.”
US President Donald Trump said in a statement issued late Friday that he wanted greater access for US goods to the giant South Asian nation, AFP reports.
“I have determined that India has not assured the United States that India will provide equitable and reasonable access to its markets,” Trump said.
“Accordingly, it is appropriate to terminate India’s designation as a beneficiary developing country.”
India was the largest beneficiary of the US GSP programme in 2017 with $5.7 billion in imports to the US given duty-free status, according to a report of Congressional Research Service, a public policy research arm of the US Congress.
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.
India, like the US and other countries, will “always uphold its national interest in these matters, according to the Indian commerce ministry statement.
“We have significant development imperatives and concerns and our people also aspire for better standards of living. This will remain the guiding factor in the government’s approach.”
It said, in any relationship, in particular in the area of economic ties, there are ongoing issues which get resolved mutually from time to time.
“We are confident that the two nations will continue to work together intensively for growing these ties further in a mutually beneficial manner.”
The Trump administration has put India under pressure by raising import tariff on steel and aluminium from India last year. By contrast, India has deferred several times imposition of retaliatory tariffs on 29 goods imported from the US.
In March, India announced it had achieved a record high of around $331.02 billion in merchandise exports in the financial year 2018-19. Yet it reportedly missed its own target of $350 billion.
India experienced merchandise goods trade deficit of $176.42 billion in 2018-19 while the overall trade deficit was $95.85 billion.