US President Trump to withdraw India from GSP scheme list as it no longer complies with eligibility criteria

Modi and Trump having good relations

The United States President Donald Trump has on Monday announced his decision of withdrawing India from enjoying Generalize System of Preference (GSP) programme on goods exported to Washington.

According to ANI news reports, the US president said the decision was taken because India now no longer comply with statutory eligibility criteria.

Under the GSP programme, also known as zero-tariff policy measures, countries under this programme list enjoys tariff concession amounting to USD 5.6 billion of exports to the USA. Since 1970, India has been enjoying this programme becoming the world’s largest beneficiary of the GSP scheme.

In a letter to the Senate president and House speaker Nancy Pelosi, Trump wrote: “In accordance with Section 502(f)(2) of the Trade Act of 1974, as amended (Trade Act) (19 U.S.C 2462(f)(2)), I am providing notice of my intent to terminate the designation of India as a beneficiary developing country under the Generalised System of Preferences (GSP) program.”

The letter further added: “I am taking this step because, after intensive engagement between the United States and the Government of India, I have determined that India has not assured the United States that it will provide equitable and reasonable access to the markets of India as set forth in Section 502(c)(4) of the Trade Act (19 U.S.C. 2462(c)(4)).”

Trump 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 move to pullout India from the scheme marks the draconian actions taken by Trump administration in order to reduce the American deficit with the large economies. While aiming to reduce country’s trade deficit, the US president had many times designated India as “high tariff nation” and also called out to decrease its heavy duties that India imposes over goods imported from the US.

Under this scheme, certain goods can enter the US duty-if only if beneficiary countries meet the eligibility criteria. Apart from India, Turkey mark as the second nation that has been removed from the GSP scheme list.

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