US plans to scrap preferential trade treatment for India

US plans to scrap preferential trade treatment for India

Trump's decision comes at a hard time for India's prime minister, Narendra Modi.

India has said the 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 U.S. president Donald Trump's accusation of the country having high tariffs.

Along with India, the same could happen with Turkey as well, said reports on Tuesday.

However, India is yet to take a call on extending the retaliatory tariffs or higher duties worth $235 million on 29 American goods beyond April 1 as it is a different issue, Wadhawan said.

India is the world's largest beneficiary of the GSP with almost 2000 of its products worth $ 5.6 billion, approximately 12 per cent of its exports to the U.S., eligible for zero-tariff export.

The trade officials also accused New Delhi of deploying "a wide array of trade barriers that create serious negative effects on United States commerce", echoing Trump's letter to U.S. lawmakers.

Reuters last month reported the planned usa action, which comes as the United States and China appear close to a deal that would roll back us tariffs on at least $200 billion worth of Chinese goods. This was primarily because the economy of Turkey had improved a lot in the last four-and-a-half decades, he said.

The e-commerce rules followed a drive by New Delhi to force global card payments companies such as Mastercard Inc and Visa Inc to move their data to India and higher tariffs on electronic products and smartphones. "The GSP system is envisaged as a non-reciprocal benefit to developing countries".

"The withdrawal of GSP benefits to India will have a minimal and moderate impact", Mr. Wadhawan said at a press conference.

Last week, India delayed until April 1 higher tariffs on some US imports announced earlier, in response to the Trump administration's refusal to exempt it from new steel and aluminum tariffs. "GSP is more symbolic of the strategic relationship, not in value terms", another government official, requesting anonymity, told news agency Reuters.

The announcement that could be seen as a major setback to bilateral trade ties.

The USTR said: "India has implemented a wide array of trade barriers that create serious negative effects on United States commerce", but did not mention the specifics in its statement. "Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion", the trade representative's office added. India declined saying it had commitments to make such medical devices affordable to the Indian patients, but agreed to open up the Indian market for a wide variety of U.S. farm produce - from cherries to chicken to milk products, which New Delhi had long resisted because of reservations over USA farm practices.

Under an agreement taking shape, Beijing would lower some barriers on USA companies' operations in China and purchase large amounts American agricultural and energy goods if the United States lowered most of the tariffs in return. It would fall further because of India's rising demand for energy and civilian aircraft, it said.

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