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- The USA has terminated India’s designation as a
beneficiary developing nation under the Generalized System of Preferences (GSP)
programme. The US has terminated India’s designation as a beneficiary under GSP
highlighting concerns over India not allowing equitable and reasonable access
to its markets.
- The decision of U.S comes in the backdrop of
issues like (a) India’s new rules on e-commerce that affected firms such as
Amazon and Walmart (b) Data localisation rules which forced foreign companies
to store their data locally (c) Price controls on medical devices (Cardiac
stents) (d) Tariff on ICT products such as smart watches and high end mobile
phones (e) Lack of greater market access for the US dairy industry and (f)
Trade imbalance between India and the US.
- 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.
- Countries like the United States and United
Kingdom, as well as the European Union give GSPs to imports from developing
countries. The objective of GSP is to give development support to poor
countries by promoting exports from them into the developed countries.
- The GSP of US provides preferential duty-free
entry for up to 4,800 products from 129 designated countries. According to
World Bank data, India is currently the largest beneficiary of the US’s GSP
programme in 2017 with $5.7 billion in imports to the US given duty-free status
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