Donald Trump terminates preferential trade status for India under GSP

The US on Friday announced its decision to end preferential tariffs to $5.6 billion of Indian exports from June 5 after determining that it has not assured the US that it will provide “equitable and reasonable access to its markets.”

“I have determined that India has not assured the US that it will provide equitable and reasonable access to its markets. Accordingly, it is appropriate to terminate India’s designation as a beneficiary developing country effective June 5, 2019,” US President Donal Trump said in a proclamation on Friday.

The US has announced the withdrawal of special duty benefits under the Generalized System of Preferences (GSP) on March 5 And were to come into force from the first week of May. However, Washington decided to postpone the implementation of its decision until May 23, when India gets a new government.

US Commerce Secretary Wilbur Ross met former commerce and industry minister Suresh Prabhu met last month wherein the two discussed issues related to ecommerce, data protection and localisation and intellectual property rights.

As per a study by the Federation of Indian Export Organisations, India’s global merchandise exports for 2018 were $324.7 billion, of which $51.4 billion were to the US. However, only $6.35 billion of exports from India to the US benefited from the GSP scheme. Such exports were covered under 1921 US tariff lines.

No exemption to PV cells, washers

The US also removed the exemption for India from application of the safeguard measures on crystalline silicon photovoltaic (CSPV) products and large residential washers effective June 5.

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“I have determined to remove it from the list of developing country WTO Members exempt from application of the safeguard measures on CSPV products and large residential washers,” Trump said in the proclamation.

In January last year, the US had implemented a safeguard measure on imports of certain CSPV cells and large washers as the individual share of total imports of the product exceeded 3% and imports of all such countries with less than 3% import share collectively accounted for more than 9% of total imports of the product.



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