No notable impact on exports: Govt on Trump's trade war

New Delhi, Mar 05: Government on Tuesday said US' withdrawal of duty benefits to its $5.6 billion of exports will not have a major impact on India's bilateral trade and denied US president Donald Trump's accusation of the country having high tariffs.

India exports goods worth USD 5.6 billion under the GSP, and the duty benefit is only USD 190 million annually, Commerce Secretary Anup Wadhawan said.

India mainly exports raw materials and intermediate goods such as organic chemicals to the US, he said. The response comes after the US government said it intends to end the preferential trade status granted to India.

"GSP withdrawal will not have a significant impact on India's exports to the US," the secretary told reporters here.

"GoI has to be conscious of our developmental and public welfare interests. Our effort was to balance the affordable prices of the medical devices without compromising on public welfare," Wadhawan said.

"GSP benefits are relatively limited," said commerce secretary Anup Wadhawan, adding that the benefits will be discontinued after 60 days. India's total GSP duty benefits were $190 million," he said.

"We have very deep routed ties with USA. All the issues in the trade domain are on the table for discussions. We will not compromise on affordability of medical devices," he added.

"Economic value of GSP benefits are very moderate. USA to terminate GSP in 60 days. Our relations remain strong with USA and discussions will go on," he further said.

Trump said on Monday he intends to end India's preferential trade treatment under a program that allows $5.6 billion worth of Indian exports to enter the United States duty free.

"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.

Trump's letter to Pelosi could be seen as a major setback in India-US bilateral relationship, in particular in the arena of trade and economy.