The US seems to be planning to put an end to the current preferential status of trade for India. It falls under a certain scheme that allows certain goods to gain entry into the US market duty-free. The U.S. President, Donald Trump commented that India had not been successful in assuring the US that it would make provisions for reasonable accessing its markets. In reaction to this move, India has confirmed that this move from the US would potentially have an economic impact of a minimal scale.
The US also aims at ending the preferential trade status of Turkey, the reason being that the nation no longer meets the qualifying criteria. This marks the latest attempt of the US to take a stand against what it views as unfair practices of trade. Trump has taken a pledge to bring about a reduction in the trade deficits for the US. He has criticized India time and again for high tariff rates. Consequently, he has directed the USTR or the US Trade Representative’s office on removing India from the program which grants preferential treatment regarding trade to the country.
Preferential treatment of trade for India, as of now, allows exports worth $5.6billion or £4.3 billion to take entry duty-free into the United States. In a letter addressed to the Congress, Trump alleged that India had failed to assure the United States of providing reasonable and equitable access to Indian markets. Under the program of Generalized System of Preferences or GSP, certain products are allowed to enter duty-free into the US in case the benefit-receiving developing country is able to meet certain criteria that the Congress has established.
These criteria include the provision of protection of intellectual property and availability of fair and reasonable market access to the US. The Commerce Secretary of India, Anup Wadhawan confirmed that such a withdrawal would minimally impact the economy of India by a margin of $190 million or £144 million.
