India presses for GSP restoration, urging US to boost trade ties
In a push to revive crucial trade benefits, India has urged the US to restore its Generalized System of Preferences (GSP) status for duty-free exports. The call came during the recent India-US Trade Policy Forum meeting, highlighting the importance of the program for both economies.
India was the largest beneficiary of the GSP program in 2017, enjoying duty-free access for nearly $5.7 billion worth of exports to the US. However, the Trump administration revoked India's GSP status in 2019, citing concerns over e-commerce regulations and market access for US products.
Indian Commerce and Industry Minister Piyush Goyal reiterated India's interest in regaining its GSP beneficiary status. He emphasized the program's potential to boost bilateral trade, particularly for small and medium-sized enterprises (SMEs) in India. "The loss of GSP status has been a major blow to Indian exporters. We are hopeful that the US government will see the benefits of restoring this program and take steps to do so soon," says Chandrajit Banerjee, Director General of the Confederation of Indian Industry (CII)
US Trade Representative Ambassador Katherine Tai acknowledged India's request, indicating that it would be "considered, as warranted, in relation to the eligibility criteria determined by the US Congress." This statement offers a glimmer of hope for Indian exporters, who have faced increased tariffs since losing the GSP benefits. "Restoring GSP benefits for India is in the best interests of both countries. It will boost bilateral trade, create jobs in both countries, and help to strengthen the US-India economic partnership," acknowledges Myron Brilliant, Executive Vice President and Head of International Affairs at the U.S. Chamber of Commerce
Analysts believe restoring GSP status would be mutually beneficial for both countries. On one hand, it would provide Indian businesses with a competitive edge in the US market, potentially leading to increased exports and job creation. On the other hand, it could help the US reduce its trade deficit with India, which has been a source of friction in recent years.
However, challenges remain. The US Congress ultimately holds the power to decide on GSP eligibility, and it is unclear whether there is sufficient political will to reinstate India's status. Additionally, some US businesses have raised concerns about India's trade practices, which could complicate the restoration process.
Despite these hurdles, India's push for GSP restoration demonstrates its commitment to strengthening economic ties with the US. The success of this effort will depend on continued dialogue between the two governments and a willingness to address each other's concerns.