US decision to withdraw GSP benefits violates global trade rules, move may impact India's exports: Experts

Federation of Indian Export Organisations said that in respect of products having GSP benefits of 3% or more, exporters may find it difficult to absorb the GSP loss.

Press Trust of India June 05, 2019 17:10:20 IST
US decision to withdraw GSP benefits violates global trade rules, move may impact India's exports: Experts
  • The decision also undermines the objective recognised in the preamble to the WTO agreement

  • CII stated that this decision has been taken in haste and would hurt domestic exporters

  • The US alleged India is not providing equitable market access to its companies

New Delhi: The US' decision to withdraw incentives for Indian exporters violates global trade rules as it discriminates among developing countries, trade experts say.

The US has decided to roll back export incentives provided under Generalised System of Preferences (GSP) from 5 June. The move is expected to impact India's exports worth $5.6 billion under this programme.

Dhruv Gupta, Partner (International Trade), Lakshmikumaran & Sridharan, said that irrespective of the eventual trade impact, the US' action of withdrawal of benefits against India is at loggerheads with its WTO obligations.

US decision to withdraw GSP benefits violates global trade rules move may impact Indias exports Experts

Representational image. Reuters.

"It goes against the fundamental principle of non-discrimination because it discriminates between developing countries," Gupta said in a statement.

The decision also undermines the objective recognised in the preamble to the World Trade OrganiSation (WTO) agreement that there is a need for 'positive efforts' to ensure that developing countries secure a share in their growth in international trade commensurate with the needs of their economic development, he said.

Industry body CII has stated that this decision has been taken in "haste" and would hurt domestic exporters.

It has expressed hope that both the US and India would discuss the matter and find an amicable solution to this issue.

Federation of Indian Export Organisations (FIEO) said that in respect of products having GSP benefits of 3 percent or more, exporters may find it difficult to absorb the GSP loss.

The sectors which would be impacted include most imitation jewellery, leather articles, pharmaceuticals, chemical and plastics, basic and processed agri goods, it said.

"Government should provide some supports to products where GSP loss has been significant so that the market is not lost. Extension of rebate of state and central tax levies scheme on such products on exports to the US will be beneficial," FIEO president Ganesh Kumar Gupta said.

As many as 1,900 Indian products from sectors such as chemicals and engineering get duty free access to the US market under the GSP, introduced in 1976.

The US has alleged that India is not providing equitable market access to its companies and has raised serious concerns over capping of prices of certain medical devices. It is also seeking market for its dairy products.

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Australia suspends extradition treaty with Hong Kong, extends visas; China threatens retaliation
World

Australia suspends extradition treaty with Hong Kong, extends visas; China threatens retaliation

Prime Minister Scott Morrison also made a pitch for international businesses with regional headquarters in Hong Kong to relocate to Australia

Centre allows export of COVID-19 PPE medical coveralls, fixes cap of 50 lakh units per month
Business

Centre allows export of COVID-19 PPE medical coveralls, fixes cap of 50 lakh units per month

The product was banned for export earlier, but has now been moved to the restricted category, under which an exporter would have to seek a licence from the government for shipments.

China calls for reversal of ban on 59 apps, says it hasn't taken restrictive measures against Indian products and services
World

China calls for reversal of ban on 59 apps, says it hasn't taken restrictive measures against Indian products and services

Chinese commerce ministry Spokesman Gao Feng said that China has not taken any restrictive measures against Indian products and services.