Some Developed Countries including European Union (EU) provide unilateral tariff preferences on exports from developing countries/least developing country under their Generalised System of Preferences(GSP) Scheme.
USA has terminated preferential tariff benefits being granted to India under its Generalized System of Preferences scheme from June 5, 2019. India exported goods worth of USD 6.3 billion(as per USTR data) to U.S. under the GSP programme during the calendar year 2018, which was12.1% of India’s total export to U.S in that year. The total duty concessions accruing on account of Generalized System of Preferences (GSP) were USD 240 million in 2018 which was about 3.8% of the value of India’s exports to the US availing GSP benefits in 2018. Issues related to dairy products and medical devices were part of the GSP review instituted by the US, which led to the above outcome. These concessions will no longer be available.
The impact will vary across products depending on the individual product concessions constituting the average tariff concession of 3.8% of the value of the India’s export to the US availing GSP benefits, and other factors specific to each product. Indian industry is competitive in their export products and we do not foresee significant impact on our foreign trade.
Trade related issues are a part of any ongoing economic relationship, and will continue to be discussed and addressed as a part of the regular bilateral trade engagement between India the US.
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