Business & Economy

India says concessions under GSP amounted to duty reduction of only $ 190 million per annum

NetIndian News Network

New Delhi, March 5, 2019

A day after United States President Donald Trump announced his intent to terminate the designation of India as a beneficiary developing country under the Generalised System of Preference (GSP) program, New Delhi has said that the concessions amounted to duty reduction of only $ 190 million per annum.
A statement from the Ministry  of Commerce and Industry also said that, since the review initiated by the US in April 2018 on India's GSP benefits, the two countries had been discussing various  trade issues of bilateral interest for a suitable resolution on mutually acceptable terms.
The statement said India was agreeable to a "very meaningful mutually acceptable package" to be agreed to at this time while keeping remaining issues under discussion in the future.
Reacting to the 60-day withdrawal notice to India on the GSP benefits extended by the US, India said the GSP benefits were "envisaged to be non-reciprocal and non-discriminatory benefits extended by developed countries to developing countries".
"In India's case the GSP concessions extended by the US amounted to duty reduction of only USD 190 million per annum," it said.
The statement said the US had initiated the review on the basis of representations by the US medical devices and dairy industries, but subsequently included numerous other issues on a self-initiated basis. 
"These included issues related to market access for various agriculture and animal husbandry products, relaxation / easing of procedures related to issues like telecom testing / conformity assessmentand tariff reduction on ICT products.  The Department of Commerce engaged with various Government of India departments concerned with these issues, and India was able to offer a very meaningful way forward on almost all the US requests. In a few instances, specific US requests were not found reasonable and doable at this time by the departments concerned, in light of public welfare concerns reflective of India's developing country status and its national interest.
"India was ready to address US concerns regarding medical devices in principle, by putting in place a suitable trade margin approach in a reasonable time frame to balance concerns about fair pricing for the consumers and adequate remuneration for the suppliers. On the issue of dairy market access, India has clarified that while our certification requirement, that the source animal had never been fed animal derived blood meal, is non-negotiable, given the cultural and religious sentiment, the requested simplified dairy certification procedure, without diluting this requirement, could be considered.
"Acceptability of US market access requests related to products like alfalfa hay, cherries and pork was conveyed. On reduction of our IT duties, India's duties are moderate and not import stopping. Any MFN duty reduction would almost entirely benefit third countries. Accordingly, India conveyed willingness to extend duty concessions on specific items in which there is a clear US interest. On telecom testing, India was willing to consider discussions for a Mutual Recognition Agreement," it said.
According to the statement, due to various initiatives resulting in enhanced purchase of US goods like oil and natural gas and coal, the US trade deficit with India has substantially reduced in calendar years 2017 and 2018. 
"The reduction is estimated to be over USD 4 billion in 2018, with further reduction expected in future years on account of factors like the growing demand for energy and civilian aircrafts in India. This reduction has happened in the face of a rising overall US trade deficit, including with some other major economies. India is also a thriving market for US services and e-commerce companies like Amazon, Uber, Google and Facebook with billions of dollars of revenue.   
"The issue of Indian tariffs being high has been raised from time to time. It is pertinent that India’s tariffs are within its bound rates under WTO commitments, and are on the average well below these bound rates. India’s trade weighted average tariffs are 7.6%, which is comparable with the most open developing economies, and some developed economies. On developmental considerations there may be a few tariff peaks, which is true for almost all economies," the statement added.

Related Stories

(Our News Desk can be contacted at

Did you like this story?
and help us to serve you better.