Trump Announces Decision to Revoke India's 'Developing Country' GSP Status

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The Office of the US Trade Representative said Washington "intends to terminate India's and Turkey's designations as beneficiary developing countries under the GSP programme because they no longer comply with the statutory eligibility criteria".

Mr Trump has pledged to reduce U.S. trade deficits, and has repeatedly called out India for high tariffs.

Trump also said that he was ending the GSP for Turkey because of its economic success and rising living standards that would no longer make it eligible for the programme that is meant to help developing countries.

Mukherjee said India has outgrown its GSP status, although she did dispute Trump's assertion that India is not providing the US with reasonable market access.

The U.S. says its goods and services trade deficit with India is more than $27 billion.

"I will continue to assess whether the Government of India is providing equitable and reasonable access to its markets, in accordance with the GSP eligibility criteria", he said.

Meanwhile, Turkey's trade minister said Washington's plan conflicted with the North Atlantic Treaty Organisation allies' push to increase commercial exchanges.

Explained | India gained from being on USA trade preference list, what happens now? However, India deferred implementation of the decision as talks were going on between the two sides for a trade package. This includes data localization, tariffs that India charges US imports and new e-commerce rules. "For the sake of the many Americans and Indians who relied on GSP benefits, I hope that India will work to quickly address these legitimate concerns".

GSP benefits are envisaged to be non-reciprocal and non-discriminatory benefits extended by developed countries to developing countries."In India's case, the GSP concessions extended by the United States amounted to duty reduction of only 190 million dollars per annum", said an official statement.

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Trump slammed India over the weekend, calling it a "high-tariff" nation at the Conservative Political Action Conference, adding: "When we send a motorcycle to India, it's a 100% tariff".

In 2017, the United States protested against India's decision to cap prices of medical devices.

Trump's targetting of what he considers imbalanced trade relationships has sparked a trade war with Beijing that has dragged on for almost a year.

The government had, in the middle of previous year, decided the list of items on which it would impose retaliatory tariffs but has since then postponed the deadline of implementation six times.

Removing India from the preferential tariff system will take effect 60 days following the notification.

India's top GSP exports to the United States in 2017 included motor vehicle parts, ferro alloys, precious metal jewelry, building stone, insulated cables and wires, said business grouping the Confederation of Indian Industry. "The decision will also negatively affect U.S. small and medium-sized enterprises and manufacturers", Ruhsar Pekcan said on Twitter on Tuesday.

"Evidently, all the flexibility we showed did not meet their requirements", the official added.

"Modi has claimed that his personal diplomacy with leaders like Trump has led to benefits for India", Mihir Sharma said.

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