US Senators John Cornyn and Mark Warner have asked the US State Department to delay the issuance of a Presidential proclamation to withdraw India's GSP benefit "by at least 30 days" beyond the stipulated time in order to move negotiations beyond ongoing elections, which may "serve as a hindrance" for the Indian side.
In a letter addressed to US Trade Representative Robert Lighthizer, the co-chairs of the United States Senate's India Caucus said: "As you know, India's elections will conclude on May 23, 2019. We believe that the election season may serve as a hindrance for our Indian counterparts in negotiating and concluding a deal on difficult political issues."
"If another round of negotiations during the election season does not resolve the outstanding issues, we would ask you to consider delaying the issuance of a Presidential proclamation to withdraw India's Generalised System of Preferences (GSP) benefits by at least 30 days, beyond the 60 day calendar, in order to move the negotiations beyond India's elections," the co-signed letter, sent on April 12, read.
"We believe that allowing for continued negotiations beyond the elections would underscore the importance of this bilateral relationship and provide a real opportunity to resolve these market access issues, potentially improving the overall US-India relationship for years to come," the two Senators wrote.
Trump cited India's non-compliance with the statutory eligibility criteria as the reason behind the decision.
Under the GSP or zero-tariff policy measures, India enjoys tariff concession costing to USD 5.6 billion of exports to the US. India has been the world's largest beneficiary of the GSP scheme that has been in force since the 1970s.
The two Senators highlighted that the US decision would affect American consumers. "While we agree that there are a number of market access issues that can and should be addressed, we do remain concerned that the withdrawal of duty concessions will make Indian exports of eligible products to the United States costlier, as the importer of those products will have to pay a "Most Favored Nation" (MFN), duty which is higher than the rate under GSP. Some of these costs will likely be passed on to American consumers," the letter stated.
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