US decision to terminate preferential trade status an attempt to 'bully' India: SJM

Terming the Trump administration's decision to end preferential treatment to India an attempt to "bully" the country, RSS-affiliate Swadeshi Jagran Manch (SJM) Sunday claimed that the US wants India to tweak its policies in interest of Walmart and Amazon.

The US has said it will withdraw incentives to Indian exporters provided under its Generalized System of Preferences (GSP) programme with effect from June 5.

"What the US is trying to do is bully India on certain issues where India cannot take a decision in favour of the US," SJM co-convener Ashwani Mahajan said.

US retail giant Walmart is trying to enter India in a big way after acquiring majority stake in e-commerce firm Flipkart, while another US-based e-commerce major, Amazon, has already acquired a big market in the country.

Both these multi-national companies are "apparently upset with our government's e-commerce policy", Mahajan said.

The new e-commerce regulations, which came into effect earlier this year, bar online marketplaces with foreign investments from selling products from retailers in which they hold stakes.

The regulations also prohibit the e-commerce players from entering into any exclusive agreement for the sale of a product, a decision which has not gone down well with the US-based multi-national giants.

"The US wants India to tweak its policies in interest of Walmart and Amazon, which India cannot do. This is one of the reasons why the US has withdrawn the benefits given to Indian exporters," Mahajan alleged.

The SJM has been opposing expansion of US-based e-commerce players in India as the Sangh offshoot believes it is severely impacting small shopkeepers across the country.

India exports goods worth USD 5.6 billion under the GSP, and the duty benefit is only USD 190 million annually.

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.

Talking about the economic reforms required in the second tenure of Prime Minister Narendra Modi-led BJP government, Mahajan said the first step should be to reduce the repo rate by 50 basis points.

"The RBI should reduce the repo rate by 50 basis points to provide much needed boost to the economy," he said.

The RBI's Monetary Policy Committee (MPC) is slated to announce its bi-monthly policy on Thursday.

The central bank cut the short-term lending rate (repo rate) by 25 basis points in each of the last two policy reviews.

The MPC headed by RBI Governor Shaktikanta Das will meet for three days beginning June 4 to firm up the second bi-monthly monetary policy.