Foreign Policy Watch: India-United States

US announces GSP eligibility review of India


Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora

From UPSC perspective, the following things are important:

Prelims level: Generalized System of Preferences, market access

Mains level: Trade war between various nations and its impact on global economy

Addressing market access concerns of India

  1. The US has announced eligibility review of India for the Generalized System of Preferences (GSP)
  2. This decision is based on the market access concerns the US has with India

Generalized System of Preferences (GSP)

  1. The GSP is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries
  2. Introduced in 1976, a wide range of industrial and agricultural products originating from certain developing countries are given preferential access to American markets
  3. Congress last month had voted to renew the GSP through 2020

Why such review?

  1. The petitions filed by the US dairy industry and the US medical device industry requested a review of India’s GSP benefits
  2. They wanted an investigation of Indian trade barriers affecting the US exports in those sectors
  3. According to them, India has implemented a wide array of trade barriers that create serious negative effects on US commerce

Impact on India

  1. India was the biggest beneficiary of GSP in 2017
  2. GSP enables duty-free entry of 3,500 product lines, which benefits exporters of textiles, engineering, gems and jeweler and chemical products from India
  3. Any adverse decision could hurt India’s exports to the US
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