Preferential Trade Status Current Affairs - 2019
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President Trump notified the Congress his intent to terminate trade benefits for both India and Turkey under the Generalized System of Preference (GSP) eligibility criteria.
India and GSP
- About 2,000 products, including auto components and textiles, can enter the US duty-free if the beneficiary developing country meet the eligibility criteria.
- India was the largest beneficiary of the GSP programme in 2017 with $5.7 billion in imports to the US given duty-free status.
Why the US is planning to withdraw GSP for India?
- President Trump has accused India of failing to ensure the US of “equitable and reasonable” access to its markets. The US is pressing India to reduce US trade deficits and has repeatedly called out India for high tariffs.
- Withdrawal of GSP is part of the President Trumps plan to redress what it considers to be unfair trading relationships.
India has sought talks with the US to avoid the withdrawal of the trade benefits under the GSP. India has offered a trade package to the US which promises of about Rs 35,000 crore annually in oil and gas imports from the US and another Rs 1,00,000 lakh crore in defence orders in the coming years.