The President of United States Donald Trump is likely to do-away with India’s preferential trade status. An official statement said Washington intends to terminate India’s designation as beneficiary developing country under the Generalized System of Preferences (GSP) program. The GSP is a US trade program that promotes economic growth in the developing countries. It provides preferential duty-free entry for up to 4,800 products from 129 designated beneficiary countries and territories.
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In a letter to congressional leaders, President Donald Trump said “I am taking this step because, after intensive engagement between the United States and the Government of India, I have determined that India has not assured the US that it will provide equitable and reasonable access to the markets of India.”
The US Trade Representative official said India has failed to provide assurances to allow required market access. The official explained that “under the GSP program certain products can enter the US duty-free if countries meet the eligibility criteria.” This includes ‘providing the US with equitable and reasonable market accesses’. He further said that India’s implementation of a wide array of trade barriers creates serious negative effects on the US commerce. This includes e-commerce rules that limit the way online retail giants like Amazon and Walmart (Flipkart) do business.
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In November 2018, the United States had revoked duty-free concessions on import of 50 Indian products. Now, with its GSP quashed, India will definitely feel the impact. It will be a loss of $250 million a year. An Indian government official said he hoped this would not lead to trade hurdles.