US intents to terminate trade benefits for India under GSP: All you need to know about preferential trade agreement
United States President Donald Trump has notified Congress in a letter of his 'intent to terminate' trade benefits for India and Turkey under the Generalised System of Preferences (GSP) eligibility criteria.
GSP is a US trade program designed to promote economic growth in the developing world
A wide range of industrial and agricultural products originating from certain developing countries are given preferential access to American markets
In India's case, it enables duty-free entry of 3,500 product lines
United States President Donald Trump has notified Congress in a letter of his "intent to terminate" trade benefits for India and Turkey under the Generalised System of Preferences (GSP) eligibility criteria.
GSP is a US trade program designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 4,800 products from 129 designated beneficiary countries and territories.
Introduced in 1976, a wide range of industrial and agricultural products originating from certain developing countries are given preferential access to American markets, a PTI report said.
In India's case, it enables duty-free entry of 3,500 product lines, which benefits exporters of textiles, engineering, gems and jeweler and chemical products.
Nearly 2,000 products including auto components and textile materials can enter the US duty-free if the beneficiary developing countries meet the eligibility criteria established by Congress.
In accordance with US Customs and Border Protection (CBP) instructions, importers who marked their GSP-eligible articles after 1 January, 2018, with the applicable special program indicator (SPI) for GSP (A or A+) will receive automatic duty refunds without interest.
In addition, for GSP-eligible articles that entered the US during the lapse of GSP authorisation without SPI code A, importers may request a GSP duty refund request to CBP.
India was the largest beneficiary of the program in 2017 with $5.7 billion in imports to the US given duty-free status and Turkey the fifth largest with $1.7 billion in covered imports, according to a Congressional Research Service report issued in January 2019.
The GSP criteria include, among others, respecting arbitral awards in favour of US citizens or corporations, combatting child labour, respecting internationally recognised worker rights, providing adequate and effective intellectual property protection and providing the US with equitable and reasonable market access.
Countries can also be graduated from the GSP programme, depending on factors related to economic development.
Last March, Trump signed the the legislation to renew the GSP Programme as part of the Omnibus Spending Bill.
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