US to terminate preferential trade programme with India on June 5: Trump
Washington, June 01: The Donald Trump administration has terminated the preferential trade programme with India, which will come into effect June 5, 2019.
"I have determined that India has not assured the US that it will provide equitable and reasonable access to its markets. Accordingly, it is appropriate to terminate India's designation as a beneficiary developing country effective June 5, 2019," Trump said in a proclamation on Friday, ignoring the plea made by several top American lawmakers as it will cost American businesses over $300 million in additional tariffs every year.
With this, the United States has ended India's designation as the beneficiary developing country under the key GSP trade programme. The programme allows emerging countries to export goods to the United States without paying duties.
Donald Trump in March had announced his intention to remove India from the decades-old Generalized System of Preferences (GSP) program over what the United States said was lack of access to India's market.
The Trump administration has prioritised working with the Indian government to ensure that US companies have a level-playing field, a senior State Department official told reporters on Thursday, hours after Prime Minister Narendra Modi was sworn in for a second time following his spectacular electoral victory in the general election.
Under the GSP programme, nearly 2,000 products including auto components and textile material can enter the US duty-free if the beneficiary developing countries meet the eligibility criteria established by the US Congress.
India was the largest beneficiary of the programme in 2017 with $5.7 billion in imports to the US given duty-free status and Turkey the fifth largest with $1.7 billion in covered imports, according to a Congressional Research Service report issued in January.