Trump administration revokes duty-free sops on import of 50 Indian products

Ending months of speculation, the Donald Trump administration has ended benefits provided to 50 Indian exports under the US’ Generalized System of Preferences (GSP) scheme.

The US President on Wednesday signed an executive order to this effect that ended duty-free status for 50 items, including a range of inorganic and organic chemicals, agricultural products such as cucumbers and gherkin, and certain types of animal hide, among others. The impact on total exports is set to be minimal, according to a Commerce Department official.

A total of 90 items — from a large group of nations including Brazil, Argentina, Thailand, Egypt and Ecuador, among others — have been notified for which prevailing rates of import tariff will be levied when imported into the US.

India is the largest beneficiary nation under the GSP, having exported goods worth $5.6 billion to the US in 2017-18. The scheme is the largest and oldest US trade preference program designed to promote economic development by allowing duty-free entry for thousands of products, from mostly developing nations. 

Many of these nations have been at the end of Trump’s wrath after he repeatedly called out countries like India, Brazil and Argentina as developed economies that no longer require trade benefits. 

Earlier this year, the GSP eligibility of India, Indonesia and Kazakhstan was scrutinised by a sub-committee under the United States Trade Representatives office, which came down heavily on New Delhi for continuing to take advantage of liberal trade policies, while restricting market access for US goods.

According to an earlier WTO ruling, GSP benefits are non-reciprocal in nature. India had earlier threatened to drag the US to the World Trade Organization if benefits were withdrawn. “We will analyse the list of items and formulate a response quickly,” said a senior Commerce Department official.