Tuesday, 25 January 2022

US ends special trade treatment for India

AP

WASHINGTON: The US will end preferential trade status for India next week, President Donald Trump has confirmed amid a deepening row over protectionism. India had been the largest beneficiary of a scheme that allows some goods to enter the US duty-free. However that status will end on Wednesday, Mr Trump said. In March he announced that it would be revoked because India had failed to provide adequate access to its markets, but Mr Trump gave no date.

On Friday he said: “It is appropriate to terminate India’s designation as a beneficiary developing country.” Is trade spoiling the Trump-Modi bromance?

India no longer fastest-growing economy

India had said the move would have a “minimal economic impact”, but it comes at a time lower growth and record unemployment in the country.

Until now, preferential trade treatment for India under the Generalized System of Preferences (GSP) programme allowed $5.6bn (£4.3bn) worth of exports to enter the US duty free. The move is the latest push by the Trump administration to redress what it considers to be unfair trading relationships with other countries.

Last month the US ended Turkey’s preferential status under the scheme.

Mr Trump has also imposed tariffs on steel and aluminium imports from countries around the world. Last year, India retaliated against those tariff hikes by raising import duties on a range of goods.

Separately, the US is involved in an escalating trade war with China, and recently threatened tariffs on Mexican goods over illegal migration.

The new changes come just a day after President Narendra Modi was sworn in for his second term after his party won by a landslide in the recent election campaign.

In a statement, the Indian government said: “India as part of our bilateral trade discussions, had offered resolution on significant US requests in an effort to find a mutually acceptable way forward. It is unfortunate that this did not find acceptance by the US.”

The statement said that the government was “confident” that the two nations could continue to work together and grow ties in a “mutually beneficial matter”

“India, like the US and other nations shall always uphold its national interest in these matters,” said the statement, “We have significant development imperatives and concerns and our people also aspire for better standards of living. This will remain the guiding factor in the Government’s approach.”

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