New Delhi: The United States has terminated India’s designation as a beneficiary developing nation under the key Generalised System of Preference (GSP) trade programme. “I have determined that India has not assured the United States that it will provide equitable and reasonable access to its markets,” Trump said in a statement on Friday.
“The designation of India as a beneficiary developing country is terminated, effective June 5, 2019,” the US President added.
On March 4, Trump had announced that the US intended to terminate India’s designation as a beneficiary developing country under the Generalised System of Preference (GSP) programme. Trump had said that the decision was taken as ‘India no longer comply with the statutory eligibility criteria’.
In a letter to the Speaker of the House of Representatives and the President of the Senate, the US President wrote: “In accordance with Section 502(f)(2) of the Trade Act of 1974, as amended (Trade Act) (19 U.S.C 2462(f)(2)), I am providing notice of my intent to terminate the designation of India as a beneficiary developing country under the Generalised System of Preferences (GSP) program.”
“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 as set forth in Section 502(c)(4) of the Trade Act (19 U.S.C. 2462(c)(4)),” Trump added.
On May 3, twenty-four members of the US Congress sent the administration a letter urging it not to terminate India’s access to the GSP.
What is GSP?
The GSP, which is the oldest and largest US trade preference programme is designed to promote economic development by allowing duty-free entry for products from designated beneficiary countries.
Under the GSP programme, nearly 2,000 products including auto components and textile materials can enter the US duty-free if the beneficiary developing countries meet the eligibility criteria established by Congress.
According to a Congressional Research Service report issued in January, India was the largest beneficiary of the programme in 2017, with USD 5.7 billion in imports to the US given duty-free status. Turkey is the second country that has been removed from the list countries enjoying the GSP policy.
(With agency inputs)