We meet criteria for preferential trade status, India tells US ahead of PM Modi’s visit

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India on Thursday said that it meets the criteria for the Generalised System of Preferences and the US should take a call on reinstating the trade concessions. New Delhi’s comments came a day after 44 influential US lawmakers called upon the Donald Trump administration to reinstate India as a beneficiary of the scheme of duty-free import for developing nations.

“Generalized System of Preferences is a unilateral decision, given by countries to other countries based on certain criteria. We are a developing country, we meet those criteria,” said foreign secretary Vijay Gokhale in a press briefing before Prime Minister Narendra Modi’s US visit.

In June this year, the US has removed India from the removed India from the list of beneficiaries under the GSP which allowed duty-free entry of Indian goods to US. India sold an estimated $6.3 billion worth of goods to the US under this programme in 2018. Washington had cited lack of reciprocal market access by New Delhi as the reason for doing so.

In a letter to US Trade Representative Robert Lighthizer, a group of US House members said ending the preferential status for India is costing their constituents every day. The support for India was bipartisan with 26 Democrats and 18 Republicans signing the letter. The group of lawmakers was led by Congressmen Jim Himes and Ron Estes.

The policies, the lawmakers observed, negatively affect US companies which were trying to access the Indian market. “Several US industries filed petitions under GSP’s market access criterion, which were accepted for review in April 2018. Ultimately, failure to make sufficient progress on the issues led to termination of India’s GSP eligibility on June 5, 2019,” the US lawmakers said in the letter.

Latest data by the Coalition for GSP shows that India losing the trade preferential status meant that American companies lost about $30 million in July.

New Delhi has been one of the biggest beneficiaries of the Generalised System of Preferences scheme that allowed zero tariff entry to some imports from 120 countries.

The GSP is the largest and oldest US trade preference programme and meant to promote economic development by allowing duty-free entry for products from the beneficiary countries.

From September 21-27, PM Modi will visit the US. He will address the UN general assembly in New York and meet US president Donald Trump. The Prime Minister will address a rally of Indian Americans—‘Howdy Modi!’— at Houston on Sunday.