Reuters, Washington/New Delhi :
US President Donald Trump looked set to open a new front in his trade wars on Monday with a plan to end preferential trade treatment for India that allows duty-free entry for $5.6 billion worth of the country’s exports to the United States.
Trump, who has vowed to cut US trade deficits, has repeatedly called out India for its high tariffs, and US trade officials said scrapping the concessions would take at least 60 days after notifications to Congress and the Indian government. “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,” Trump said in a letter to congressional leaders.
India is the world’s largest beneficiary of the GSP program and ending its participation would be the strongest punitive action for the South Asian nation since Trump took office in 2017. The US Trade Representative’s Office said removing India from the Generalized System of Preferences (GSP) program would not take effect for at least 60 days after the notifications, and would be done through a presidential proclamation.
The preferential trade treatment brings “actual benefit” of just $250 million a year to India, however, a government source said in the capital, New Delhi, adding that it hoped the planned withdrawal would not lead to trade hurdles. “GSP is more symbolic of the strategic relationship, not in value terms,” added the source, who declined to be identified ahead of a news briefing by the Indian trade ministry.
It was not immediately clear what retaliatory action authorities in India, which is due to hold general elections this year, would take.
Trade ties with the United States were hurt after India unveiled new rules on e-commerce limiting the way internet retail giants Amazon.com Inc and Walmart Inc-backed Flipkart do business.
