Last week, India delayed higher tariffs on some U.S. imports until April 1, in response to the Trump administration's refusal to exempt it from new steel and aluminium tariffs. Trump has said weak deals have cost millions of American jobs and has vowed to cut us trade deficits.
Kolkata: The Narendra Modi government may have succeeded diplomatically in getting the United States on its side in its fight against the Pakistan-sponsored terrorism, but when it comes to trade and commerce, the Trump administration has made its intentions clear to end India's preferential trade treatment under the generalised system of preferences (GSP), precisely the same time. "Hence continuation of GSP is beneficial to both countries and the India government should try and convince the United States government that". He said that because of the US' decision, India's competitive advantage against other developing nations would get hit only marginally.
"In the four-and-a-half decades since Turkey's designation as a GSP beneficiary developing country, Turkey's economy has grown and diversified", the letter said.
The US Trade Representative's Office (USTR) said that the preferences will end in 60 days after the notification to Congress and the Indian government.
Donald Trump, who vowed to reduce U.S. trade deficits, has repeatedly called out India for high tariffs.
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India is not planning retaliatory action to US President Donald Trump's move of revoking the preferential trade partner status as it will not have much impact on trade between the world's two largest democracies. "Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion", said a USTR statement.
The US government has notified its intent to remove India from its zero-import duty programme, the Generalised System of Preferences (GSP), after a 60-day notice, though India said on Tuesday the matter can be resolved amicably through discussions.
"The GSP benefits will go, the USA will not relent on this", Mukherjee said.
According to Trump, India had failed to assure the US of getting "equitable and reasonable access" to its markets. With his domestic economy in poor health, the news from the U.S. is bound to give fresh ammunition to the Congress-led opposition to attack the government.
The primary aim of the GSP is to help developing countries, particularly in sectors where the benefits can reach the poor.
Washington has a 21-billion-dollar red ink in trade balance with New Delhi in 2018, according to statistics provided by the U.S. Census Bureau. More recently over the last weekend, he lashed out at India calling it a "high-tariff" country. India has also directed firms such as Mastercard and Visa to store user data locally (and not overseas). "They charge 100%. When India sends a motorcycle to us, we brilliantly charge them nothing".