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Know what the US GSP program and why Donald Trump made India out of it?

Saturday - June 1, 2019 2:33 pm , Category : WTN SPECIAL
India not to get the benefits of the US GSP program now!
India not to get the benefits of the US GSP program now!

USA's stance tough on GSP, India rejects much loss theory

JUNE 01 (WTN) - The president of the business mindset country USA Donald Trump has kept India excluded from the GSP trade program. After this step of US President Donald Trump, once again partial eclipse has taken place on the business relations between India and the US. What is the GSP business program, and why did the US exclude India? At the same time, what can be the damage to India, let us elaborate on this.

For your information, let you know that the Generalized System of Preferences (GSP) is America's largest and old trade preferential program. According to US policies, this program aims to promote the economic development of the developing country by allowing thousands of products without access to the US. The United States has given this facility to more than 120 countries of the world, where about 4800 items are imported and there is no import duty on these goods in the US. The United States had formed the GSP on 1 January 1976 under the Trade Act 1974.

Under the GSP program, there is no import duty on the products of many developing countries including India exported to USA. According to the information, India gets exemption on exported goods of 5.6 billion dollars (40,000 crores) under GSP. Now, when US President Donald Trump has made India out of GSP, then in such a situation, India will have to pay fixed import duty on goods exported from India. Well, for your information, let you know that India has been the biggest beneficiary of GSP.

Now let us tell you why the American President Donald Trump has decided to take India out of GSP. Indeed, according to the American President Trump, he has taken this decision, because he has not got the assurance from India that India will give equal reduction from the import duty to the American products in Indian market. Trump argues that due to restrictions on US products in India, the United States is facing a business loss. Because of these allegations, the US says that India has failed to meet GSP criteria.

Actually, US President Donald Trump says that the import duty in India is much higher than the rest of the other countries. US President Trum had gave an example and he said, "There is 100 per cent tariff on bikes like Harley Davidson exported from US to India, while the United States does not impose any tax on similar goods exported from India to the US. After this, Trump had said that the US would also now impose equitable tariff on Indian imports. Trump has taken the decision to exclude India from the GSP program by rejecting the appeal of all many MPs of the United States. The MPs argued that with this step of the American President, US industrialists would have to pay an extra $ 300 million extra for every year.

For your information, let you know that President Trump had said on 4th March, "The US is thinking to end the beneficiary status of India in GSP." And the notice received by India in this connection on May 3 ended after 60 days of US President’s announcement. After taking the decision by the US President Trump, India’s beneficiary status will close from the GSP from June 5. Actually, due to the trade war from China, the American President Trump is trying to reduce the trade deficit. Regarding India, Trump says that India has not made its markets as accessible to America, as accessible America has made its markets for India.

Now what is India's view about this, let's tell you. In this entire matter, India says that its business relationship with the US is quite strong and discussion on the issues related to the trade continues with the United States. But in case of medical equipment, India would not make any agreement. Indo-US business analysts say that the economic value of GSP benefits that India gets is not very high. For your information, let you know, India exported $ 560 million worth of goods to the United States under GSP last year. The export duty on this export was only $ 19 million. In such a way, India argues that being out of GSP does not lead to much loss to India.