Economy

25 US lawmakers urge authorities not to terminate GSP benefits to India

PTI | | Updated on: Dec 06, 2021

Neither the US nor India will benefit from terminating benefits | Photo Credit: Believe_In_Me

Say move will hurt American firms seeking to expand their exports

A group of 25 influential American lawmakers has urged the US Trade Representative not to terminate the GSP programme with India after the expiry of the 60-day notice on Friday, saying the country’s companies seeking to expand their exports to India could be affected.

The Generalized System of Preference (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.

On March 4, President Donald Trump announced that the US intends to terminate India’s designations as a beneficiary developing country under the GSP programme.

Also read:Scrapping India's trade privileges could hit US consumers: Senators

The 25 members of the US House of Representatives, in a letter, urged US Trade Representative Robert Lighthizer to continue negotiating a deal that protects and promotes jobs that rely on trade — both imports and exports — with India.

They argued that terminating GSP for India would hurt American companies seeking to expand their exports to India.

“India’s termination from GSP follows its failure to provide the US with assurances that it will provide equitable and reasonable access to its markets in numerous sectors,” Trump had said in a letter to Congress, providing a notice of his intent to terminate the designation of India as a beneficiary developing country under GSP programme.

Access to India

In his letter, Trump said that he was determined that New Delhi had “not assured” the US that it would “provide equitable and reasonable access” to the markets of India. “I will continue to assess whether the Government of India is providing equitable and reasonable access to its markets, in accordance with the GSP eligibility criteria,” he wrote.  The USTR through a simple notification in federal register can formally terminate GSP benefits to India.

Also read:World trade order, or US trade order?

Expressing concern over such a move, the lawmakers said that no party — in the US or India — would benefit from terminating GSP benefits.

“American companies that rely on duty-free treatment for India under the GSP will pay hundreds of millions of dollars annually in new taxes. In the past, even temporary lapses in such benefits have caused companies to lay off workers, cut salaries and benefits, and delay or cancel job-creating investments in the US.

Also read:India to wait for US ‘proclamation’ on GSP withdrawal before imposing retaliatory tariffs

“Terminating the GSP for India similarly would hurt, not help, companies seeking to expand their exports to India. Any progress made toward resolving issues over the last year of GSP negotiations seems unlikely to take effect if India is removed from the programme,” the lawmakers said.

“It would be a step back, not forward. Continuing negotiations is the only way to gain new market access for US exports to India,” said the letter written by these lawmakers.

Published on May 03, 2019
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