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- United States has withdrawn Generalized System of Preferences (GSP) Scheme to India provoking India to impose retaliatory tariffs on many imports of US goods.
- However,India still continues to enjoy tariff preference from many countries including Australia,Russia and Japan as well as the European Union (EU) among others.
- Further,within the group of countries that provided GSP benefit to India, exports to EU nations were highest followed by the US,Japan, Russia and Australia,respectively.
- GSP is a preferential tariff system extended by developed countries to developing countries.It is a preferential arrangement in the sense that it allows concessional low/zero tariff imports from developing countries.
- Some developed countries including European Union provide unilateral tariff preferences on exports from developing countries/least developing country under their Generalized System of Preferences Scheme.
- As per WTO,India is a beneficiary of GSP provided by Armenia, Australia, European Union,Japan,Kazakhstan,New Zealand,Norway, Russian Federation, Switzerland and Turkey.
- However,US withdrawal of GSP could affect India’s competitiveness in exports of 1,900 items including organic chemical raw materials,iron, steel,furniture,aluminium and electrical machinery as duties will now be levied on these products.
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