Trump scraps trade privilege for India; Delhi plays down impact
- Author: Darren Santiago Mar 06, 2019,
Mar 06, 2019, 0:39
US President Donald Trump has announced that he was ending India's $5.6 billion trade concessions under the Generalised System of Preferences (GSP) programme accusing New Delhi of not providing Washington "equitable and reasonable access" to its markets.
The offer did not cut any ice with Trump, who told U.S. lawmakers in a letter that India "has not assured the United States that it will provide equitable and reasonable access" to its markets and he therefore intends to terminate the preferential treatment that India has enjoyed since 1976.
India is likely to impose retaliatory tariffs on $10.6 billion worth of goods imported from the U.S., after the Trump administration chose to scrap duty benefits on $5.6 billion worth of exports from India by May, following the collapse of trade negotiations.
The US goods trade deficit with India was $22.9 billion in 2017.
Indian government "has not assured the United States that it will provide equitable and reasonable access to the markets of India", CNN quoted the letter as saying.
"The GSP benefits will go, the USA will not relent on this", she said.
U.S. and Chinese trade representatives are wrapping up talks on a new deal which will end President Trump's trade war with Beijing.
Last week, India delayed higher tariffs on some U.S. imports until April 1, in response to the Trump administration's refusal to exempt it from new steel and aluminium tariffs.
But Indian officials maintain the GSP withdrawal will not be a crushing blow; exports will continue, except they will be subject to tariffs.
In a letter to Congress leaders, Mr Trump said he was planning to remove India from the GSP because Delhi has failed to commit to allowing United States businesses equal access to Indian markets.
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The government of India said that Donald Trump's move to end preferential treatment will have very little impact.
The GSP program gives developing countries duty-free treatment for exports of thousands of products.
India said it would accept the decision without further negotiations.
"There will surely not be any significant impact on our exports or any statistical edge to our competitors", Wadhwan said, adding that India charges tariffs well in line with standards set by The World Trade Organization.
He added that India's concerns were regarding the affordability of medical devices and fair pricing.
Last year India retaliated against USA tariff hikes on steel and aluminium by raising import duties on a range of goods.
"It can become a political issue in an election year", said the official who declined to be named. The Harley-Davison tariff issue that he raked up several times over the past year is worth a laughably small amount of money.
During the recently concluded Trade Policy Forum talks, United States commerce secretary Wilbur Ross had also raised concerns regarding new trade barriers created by India, hinting at the stringent e-commerce rules that have affected United States companies, including Amazon.com Inc. and Flipkart owner Walmart Inc. India exported around $50 billion worth of goods to the United States in 2017.
President Trump stressed countries were long taking advantage of US since his State of the Union address last month.