India requests US to maintain GSP beneficiary status

India today urged the Trump Administration to retain the GSP beneficiary status to it as a withdrawal would be discriminatory and detrimental to the development, finance and trade needs of the country.

"We request the President (Donald Trump) to maintain the GSP beneficiary status to India," Puneet Roy Kundal, Minister Commerce at the Indian Embassy here, told the US Trade Representatives (USTR).

A withdrawal of the GSP benefits to India "would be discriminatory and detrimental to the development, finance and trade needs of India - a vast and diverse developing country with unique challenges," Kundal said in a written submission.

America's Generalized System of Preferences program (GSP) provides for the preferential treatment of designated articles when imported from beneficiary developing countries.

A self-initiated review by the USTR focuses on whether India is meeting the US criteria for a GSP beneficiary country and particularly if India provides equitable and reasonable market access to products from the US.

Noting that a predominant share of GSP beneficiary items exported from India are intermediaries and semi-manufactured goods, he said provision of GSP benefits to these intermediary products enables availability of cost effective and price competitive inputs to the US downstream industry.

Kundal said this helps the US industries to maintain their domestic and export competitiveness. In addition, GSP benefits are integral and geared to enhancing India's development and the pace of economic reforms, he said.

The products on which India receives GSP benefits belong to sectors which employ several thousands of men and women, especially in rural areas through micro, small and medium enterprises. The GSP benefits help the related sectors to overcome, at least partially, some of the inherent cost and logistical disadvantages prevailing in a developing economy like India, Kundal said.

Furthermore, Indian GSP exports represent a miniscule portion of the total imports of the United States and do not pose any threat or disruption to US industry, he argued.

"It is pertinent that India stands at a gross national income per capita of USD 6,490.61 per annum in PPP terms in 2016, as reported in the World Bank database, which is well below the threshold of USD 12,476 per annum per capita, according to the official statistics of the World Bank for 2016, Kundal asserted.

USTR has also accepted two petitions related to the same criterion. The petitions filed by the US dairy industry and the US medical device industry requested a review of India's GSP benefits, given India's alleged trade barriers affecting US exports in these sectors.

In respect of export of dairy products from the US to India, India has explained that its position on dairy products sourced from animals which have consumed feeds containing internal organs, blood meat etc., is based on religious, cultural and moral grounds, Kundal wrote.

India, he asserted, is committed to respect the religious and cultural beliefs of its people and it will be inappropriate to impute any other considerations. Moreover, India provides unimpeded market access to dairy products from all countries, and there are exports of these products into India.

In respect of medical devices, India, he said, submits that its position is based on providing its citizens with equitable and affordable access to essential medicines and medical devices. Price-control measures are provided only on a limited category of medicines enlisted in the National List of Essential Medicines prepared by the Ministry of Health and Family Welfare.

"The pharmaceutical companies are free to charge reasonable prices for other categories of medicines," Kundal told the USTR.