Trump plans to scrap India's preferential trade treatment

Washington, Mar 05: US President Donald 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, Reuters reported.

"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.

"I will continue to assess whether the Government of India is providing equitable and reasonable access to its markets, in accordance with the GSP eligibility criteria," Trump said in his letter, a copy of which was released to the press.

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.

In a separate statement, the US Trade Representative (USTR) said India's termination from GSP followed its failure to provide the US with assurances that it would provide equitable and reasonable access to its markets in numerous sectors.

Under the United States GSP programme, certain products can enter the US duty-free if the beneficiary developing countries meet the eligibility criteria established by Congress.

The GSP criteria include, among others, respecting arbitral awards in favour of US citizens or corporations, combatting child labour, respecting internationally recognised worker rights, providing adequate and effective intellectual property protection and providing the US with equitable and reasonable market access. Countries can also be graduated from the GSP programme, depending on factors related to economic development.

The Trump Administration had launched an eligibility review of India's compliance with the GSP market access criterion in April 2018.

"India has implemented a wide array of trade barriers that create serious negative effects on United States commerce. Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion," the USTR said. The US had designated Turkey as a GSP beneficiary developing country in 1975.

OneIndia News (with agency inputs)