India May Lose GSP Status
New Delhi (Reuters) February 8, 2019
Dear Valued Customer:
According to a news article posted by Reuters on February 8, “India could lose a vital U.S. trade concession, under which it enjoys zero tariffs on $5.6 billion of exports to the United States, amid a widening dispute over its trade and investment policies, people with close knowledge of the matter said.”
Withdrawing the Generalized System of Preferences (GSP) from India would be the strongest punitive action against India since President Donald Trump took office in 2017. Trump has repeatedly called out India for its high tariffs, it said.
India’s imposition of higher tariffs on electronic products and smartphones negatively affected a broader trade package the two sides were working on since last year. GSP was tied to the trade package and since that deal had slipped further away, the United States was considering withdrawing or scaling back the preferential arrangement, people familiar with the matter said.
The U.S. Trade Representative (USTR) was completing a review of India’s status as a GSP beneficiary and an announcement is expected over the next two weeks, they said.
If the United States eliminates duty-free access for about 2,000 Indian product lines, small businesses such as jewelry will mostly be hurt. The number of goods qualifying for preferential treatment could be reduced, or the whole program could be withdrawn.
“India fears Trump may also demand a free trade agreement if both sides fail to reach a compromise on a trade package. Such a pact would mean zero tariffs for U.S. goods arriving in India, further threatening local industry,” the article said.
Decisions on GSP status for India, Thailand, Indonesia or Kazakhstan may come some time in March.
According the USTR, India is the top beneficiary of GSP, accounting for $5.6 billion of the program’s $21.1 billion in imports last year, and nearly 12 percent of India’s exports to the U.S. are covered by GSP.
Thank you for your attention and cooperation. If you have any questions, please contact your nearest JJB representative.
Keep yourself updated with the latest industry happenings, subscribe to JJB’s Newsletters!
The information accompanying this newsletter contains confidential information belonging to the sender which is legally privileged. The information is intended only for the use of customers of James J. Boyle & Co. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution or the taking of any action in reliance on the content of this information is strictly prohibited. James J. Boyle & Co. will also not be held accountable for any discrepant information. The service we provide is based on our "Terms and Conditions of Service", which is available upon request.