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than those of competitors from other
countries enjoying GSP preferences.
The US, however, has given a grace
period of 60 days.
The US threat came when Trade
Representative (USTR) said: “At the
direction of President Donald J. Trump,
US Trade Representative Robert Light-
hizer announced that the United States
intends to terminate India’s and Tur-
key’s designations as beneficiary devel-
oping countries under the Generalized
System of Preferences (GSP) program
because they no longer comply with
the statutory eligibility criteria.
India’s termination from GSP fol-
lows its failure to provide the United
States with assurances that it will pro-
vide equitable and reasonable access
to its markets in numerous sectors.”
Turkey, despite being a close NATO ally,
is being punished for breaking from its
fold and endeavouring to partner with
Russia in Syria.
The Trump administration has
notified itsintentiont to remove India • Friend or foe? Trump attacks India on trade substantive package that India and the
from a list of beneficiary countries of a even as US seeks its help on China US were working on to resolve trade
zero-import duty programme, called issues.
the Generalized System of Prefer- Higher duties have been proposed
ence (GSP), for not granting American on US walnuts, chickpeas, lentils, boric
producers “reasonable access” to its acid and diagnostic reagents, among
markets. other goods, imposing an additional
burden of $290 million on them. With
How India gained? the new tariffs, import duty on walnuts
India has been the top beneficiary of would quadruple to 120 per cent, while
this programme that extendsthe zero- that on chickpeas, Bengal gram (chana)
tariff regime for some goods, not all, to and masur dal would more than dou-
120 countries. It exported an estimated ble to 70 per cent from 30 per cent. The
$5.6 billion worth of goods to the US Foreign Affairs levy on lentils would be increased to
under this scheme in 2017, more than 11 40 per cent from 30 per cent.
per cent of the total value of it exports experts suggest India had earlier too threatened to
to the United States, $48.6 billion. that the main reason impose higher duties but had repeat-
India has a 60-day notice period edly extended the deadline in the hope
during which it can persuade US to why the US intends of resolving ongoingtrade issues with
continue with preferential status. Now to end beneficiary the US ranging from GSP, agriculture
that would be possible only if India and dairy to medical devices, telecom
yield s to US demands. In view of forth- developing country and e-commerce. India imported $5.45
coming elections that policy shift may billion of mineral fuels, mineral oils,
not be possible. Is it a very shortsighted status to India is that bituminous substances and mineral
decision by the Trump administration? our country is not waxes from the US in the April-De-
Would India urge US to reconsider cember period of 2018-19 compared
its move? However, it seems that India blindly following with $4 billion of these purchases in
is likely to impose higher duties on the Trump policy 2017-18. US export to India have “risen
29 goods imported from the US from by 30 per cent in the last six months
April 1. The decision could derail the to corner China and could touch 40 per cent next year”,

Tehelka / 31 march 2019 59 www.Tehelka.com