According to the regulation, which formally entered into force on January 1, 2026, and will remain in effect till December 31, 2028, specific tariff preferences have been suspended for certain GSP beneficiary countries, including India. Under the new GSP treatment, agricultural products are not included, and in the non-agricultural sector, GSP benefits for only leather have been reinstated.
“In 2023, EU imports from India amounted to approximately €62.2 billion. Of this, only €12.9 billion was eligible under the EU’s Standard GSP framework. India has graduated from 12 major product categories. As per the new regulation, €1.66 billion of trade is expected to graduate out of the GSP regime, leaving the eligible GSP trade at €11.24 billion as per 2023 data,” the department said, adding that the graduation process is based on the competitiveness of a country’s exports, which is periodically reviewed by the EU.
India’s graduation over time is on account of the increasing competitiveness of its exports, it said.
The EU has removed GSP benefits across almost all major industrial sectors, including mineral products, inorganic and organic chemicals, plastics, rubber products, textiles, stone, plaster, cement, asbestos, mica or similar materials; ceramic products, glass and glassware, pearls and precious metals, iron, steel, machinery, motor vehicles and bicycles, among others.
According to the department, GSP is a unilateral trade preference scheme under which the EU grants reduced or zero customs duties to imports from developing and least-developed countries. GSP is non-reciprocal and operates as an exception to the World Trade Organization’s Most-Favoured-Nation (MFN) principle. Its permanent legal basis under WTO law is the 1979 Enabling Clause, which allows developed countries to grant differential and more favourable treatment to developing countries, it said.
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