News Desk |
US President Donald Trump on Monday announced his decision to put an end to India’s special trade treatment on grounds of New Delhi’s failure to assure that the United States has “equitable and reasonable access to the markets of India”. Trump has slammed India with for unfair treatment to American businesses and producers, reported CNN.
Through a strongly worded letter submitted to the Congress, Trump informed of his decision to eliminate India’s status as a special trade partner, which India had acquired through the Generalized System of Preferences (GSP) program that provided developing nations greater access to the American markets.
Trump has slammed India with for unfair treatment to American businesses and producers, reported CNN.
The letter addressed to the House of Representatives and the Senate, later released to the press, stated, “I am providing notice of my intent to terminate the designation of India as a beneficiary developing country under the Generalized System of Preferences (GSP) program.” President Donald Trump wrote that he had “determined that India has not assured the United States that it will provide equitable and reasonable access to the markets of India”.
Read more: ‘India will find out’: Trump threatens
He further added, “I will continue to assess whether the Government of India is providing equitable and reasonable access to its markets, in accordance with the GSP eligibility criteria.” The GSP programme provides 120 developing countries easier access to the US markets with a zero-tariff extension on certain goods, and India quickly acquired the status of the major beneficiary of this program.
CNN reports that in 2017, India dispatched $5.6 billion worth of exports to the US through this program; however, President Donald Trump has accused India of imposing unfair trade duties on US merchandise and products time and again. In April 2018, the US government had announced its decision to “review New Delhi’s eligibility for the GSP program” because of the financial damages faced by multiple American dairies and medical traders due to the non-tariff barriers imposed by India.
India had acquired through the GSP program that provided developing nations greater access to the American markets.
Earlier in January, Trump had targeted the 150% Indian tariff on whiskey imported from the US, and once again, on Monday, he lambasted India for imposing high-tariffs. This decision has come in the wake of the ongoing Pak-India tensions over the Pulwama attack, and the upcoming Indian election. It appears that Indian Prime Minister Narendra Modi’s “Make in India” campaign is becoming an obstacle to US President Donald Trump’s “Buy American, Hire American” campaign.
India’s Response to Trump’s Decision
On Tuesday, Indian Secretary of Commerce Anup Wadhawan replied to Trump’s accusation by stating that India reaps a “minimal and moderate” benefit from the tax exemptions provided by the US, which amount up to a mere $190 million each year. The Press Trust of India (PTI) news agency quoted Wadhawan, “India exports goods worth USD 5.6 billion under the GSP, and the duty benefit is only USD 190 million annually.”
Read more: Decent news coming from Pakistan, India: Trump
Wadhawan went on to say that President Donald Trump’s decision to eliminate India’s special trade status and removal from the GSP program will not have a “significant impact” on Indian exports. He added that New Delhi had provided the US with a reasonable and meaningful trade agreement; however, the two states could not come to an agreement because, Wadhawan told the press, “There were some additional requests beyond that, which could not be accepted at this time.”
A statement issued by the US Trade Representative’s office states that President Trump’s letter to the House of Representatives and the Senate has kicked off a 60-day deadline before he can officially deprive New Delhi of its preferential trade treatment. This decision has come a month after US Commerce Secretary Wilbur Ross cancelled his trip to India, and he attributed his last-minute flight cancellation to “bad weather”.
Mina Jahangir with additional input from News Desk.