US terminates India from the GSP programme

India has been terminated by The US from Generalised System of Preferences (GSP) programme. The decision was declared in March and it was put into action from June 5.

GSP is the largest and oldest US trade preference program, established by the Trade Act 1974. This program promotes economic developmenmt of many developing countries by eliminating duties on various products when imported from that country.

The US claims that India has implemented wide array of trade barriers that can create serious negative effects on US commerce. It further adds “ India has failed to provide assurances that it will provide equitable and reasonable access to its markets in numerous sectors”.

The sectors that will be mainly impacted are jewellery, leather, pharmaceuticals, chemicals, plastics and agricultural products.

After this declaration, Piyush Goyal, current minister of Railways and Commerce, said addressing the media that India graciously accepts the fact that development assistance hitherto provided by other nations has stopped.

“We believe that in our development cycle, several countries were giving us support to help us to move out of our problems faster. But if certain countries have chosen a different path, we will reorient ourselves to be competitive,” said Goyal.

Under GSP, India is the largest beneficiary nation and just last year, exported goods worth $6.35 billion.

Considering this, the traders have pointed out a concern that India remains under pressure due to increasing competition and surrendering the GSP issue will only make us lose market share.

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