Trump scraps trade privilege for India: Delhi plays down impact

Trump scraps trade privilege for India: Delhi plays down impact

Trump scraps trade privilege for India: Delhi plays down impact

U.S. President Donald Trump holds a bilateral meeting with India's Prime Minister Narendra Modi alongside the ASEAN Summit in Manila, Philippines November 13, 2017.

Notably, India exports worth $5.6 billion that enter the United States duty-free.

US President Donald Trump's attempt to pressure India on trade may be intended as a symbolic shot across New Delhi's bow, but its inopportune timing threatens broader political consequences.

The United States imported $1.66 billion in 2017 from Turkey under the GSP program, representing 17.7 percent of total USA imports from Turkey, according to USTR's website. While it is not clear whether India will take retaliatory action, the world's fifth-largest economy has indicated that retaliatory tariffs will be kept out of current discussions.

India, meanwhile, is being terminated from the programme because it has failed "to provide the United States with assurances that it will provide equitable and reasonable access to its markets in numerous sectors".

"Economic value of GSP benefits are very moderate".

Trump's targetting of what he considers imbalanced trade relationships has sparked a trade war with Beijing that has dragged on for almost a year.

The US dairy industry was a strong advocate of ending the GSP for India citing its difficulties in exporting to India.

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Of the 3,700 products it covers, India made use of the concession for just 1,784, Wadhawan told reporters in the Indian capital.

Explaining the move, the body stated that the aforementioned states were no longer qualified as "beneficiary developing countries" under Washington's Generalised System of Preferences (GSP).

The changes may not take effect until at least 60 days after the notifications to Congress and the governments of India and Turkey.

According to sources in the Ministry of External Affairs, both sides had been discussing and negotiating this package for over seven or eight months now, and so, India was under the impression that the USA would not make a move on the GSP.

The GSP programme allows duty-free entry of around 1,900 products from India into the USA, benefiting exporters of textiles, engineering, gems and jewellery and chemical products.

India capped pricing of medical devices such as stents and knee caps previous year, reducing the price of these devices by over 60 per cent.

Trade ties with the United States suffered after India adopted new rules on e-commerce curbing how internet retail giants Amazon.com Inc and Walmart Inc-backed Flipkart do business. "Moving GSP imports from the docks to U.S. consumers, farmers, and manufacturers supports tens of thousands of jobs in the United States", added the USTR office. When we send a motorcycle to India, it's a hundred percent tariff. It would fall further because of India's rising demand for energy and civilian aircraft, it said.

U.S. -India ties are more of "a collaboration of convenience", said Nick Bisley, an global relations professor at Melbourne's La Trobe University.

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