Trump calls off preferential trade with India, bars duty-free imports

March 5, 2019
WASHINGTON: The US plans to end the preferential trade treatment for India and Turkey, the US trade chief's office has said. This follows President Donald Trump's recent statement that India is "a high-tariff country." And as for Turkey, the trade office said, that country has developed enough not to attract preferential treatment.

India currently exports $5.6 billion of goods to the US duty-free under the Generalised System of Preferences (GSP). The "actual benefit" from the preferential trade treatment is $250 million a year.

The Indian Government on Tuesday said that the move will not have a "significant impact" on India. "It seems like we're looking at a non-GSP trade with the US," Commerce Secretary Anup Wadhawan said at a media briefing. The "actual benefit," which will be impacted from the US' decision will only be to the tune of $190 million, he claimed, according to NDTV.

The withdrawal of free trade is likely to hit raw materials and intermediary goods, he said. Wadhawan said "trade talks with US will continue.

While the US had a big share in Indian medical devices market, India capped pricing of devices like stents and knee caps recently. Trump had taken objections to Indian trade curbs. He also called India "a high-tariff country."

The US Trade Representative's Office said it will take at least 60 days for the new regime to take effect. India is the world's largest beneficiary of the GSP programme.

Washington "intends to terminate India's and Turkey's designations as beneficiary developing countries under the Generalised System of Preferences (GSP) programme because they no longer comply with the statutory eligibility criteria," the Office of the US Trade Representative said in a statement on Monday, according to Al Jazeera.

India has failed to provide assurances that it would allow required market access, while Turkey is "sufficiently economically developed" that it no longer qualifies, the statement said.

Under the GSP programme, "certain products" can enter the US duty-free if countries meet eligibility criteria including "providing the US with equitable and reasonable market access".

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