No Big Impact: India After Trump Says Will End Preferential Trade Status

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Trump plans to end India's preferential trade treatment

File photo of USA president Donald Trump and Prime Minister Narendra Modi.

President Donald Trump delivered notice Monday he plans to end key trade preferences for India and Turkey.

Hours after the United States announced its intention to "terminate" New Delhi's designation as a beneficiary of its Generalised System of Preferences (GSP), Commerce Secretary Anup Wadhawan said India does not plan to impose retaliatory tariffs on the U.S. goods. Announcing the termination, Trump said India had "not assured" the U.S. that it would "provide equitable and reasonable access" to its markets.

Trump, who has vowed to reduce United States trade deficits, has repeatedly called out India for its high tariffs.


India is the world's largest beneficiary of the GSP programme and stopping its participation would be the strongest punitive action against India since Trump took office in 2017.

"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", Trump is reported to have said.

Reuters last month reported the planned usa action, which comes as the United States and China appear close to a deal that would roll back us tariffs on at least $200 billion worth of Chinese goods.

USA commerce secretary Wilbur Ross recently raised concerns regarding new trade barriers created by India, hinting at the stringent e-commerce rules that affected United States companies such as Amazon and Walmart-owned Flipkart. "They charge us a lot", he had said. It argues the country no longer meets the criteria because it is "sufficiently economically developed".


It said in August it was reviewing Turkey's eligibility in the program after Ankara imposed retaliatory tariffs on United States goods in response to American steel and aluminium tariffs.

Commerce Secretary Anup Wadhawan said the withdrawal of the GSP for Indian products would have limited impact.

"GSP is more symbolic of the strategic relationship not in value terms", the source told Reuters news agency, declining to be named ahead of a press briefing by the Indian trade ministry. The rules caused severe disruptions for Amazon and Flipkart, which is majority-owned by the U.S. retail giant Walmart. India also boosted tariffs on electronics and smartphones. India declined saying it had commitments to make such medical devices affordable to the Indian patients, but agreed to open up the Indian market for a wide variety of United States farm produce - from cherries to chicken to milk products, which New Delhi had long resisted because of reservations over U.S. farm practices. "Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion", the USTR said.

Under an agreement taking shape, Beijing would lower some barriers on USA companies' operations in China and purchase large amounts American agricultural and energy goods if the United States lowered most of the tariffs in return.


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