US to review 3,500 Indian exports getting duty free access

NEW DELHI: Based on the market access concerns it has with India, the US has announced eligibility review of India for the Generalized System of Preferences (GSP), a sort of quota for each country at low or no duty.

India is the largest beneficiary of the GSP among developing countries at $5.6 billion with 3,500 products getting duty-free access to the US market. Mechanical machinery, organic and inorganic chemicals, electrical machinery, plastics and edible vegetables are eligible to get the preferential tariff benefits while apparel, footwear, glass and watches are not on the list.

At the same time, the US is also reviewing the eligibility of Indonesia and Kazakhstan based on concerns about the countries' compliance with the programme as per the Trump Administration’s new GSP country eligibility assessment process as well as GSP country eligibility petitions.

“GSP provides an important tool to help enforce the Trump administration's key principles of free and fair trade across the globe. The President is committed to ensure that those countries who receive GSP benefits uphold their end of the bargain by continuing to meet the eligibility criteria outlined by Congress,” said Deputy US Trade Representative Jeffrey Gerrish.

The GSP is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries. Congress last month had voted to renew the GSP through 2020.

The USTR said it is launching a self-initiated GSP eligibility review of India based on concerns related to its compliance with the GSP market access criterion and is also accepting two petitions related to the same criterion.

The petitions filed by the US dairy industry and the US medical device industry requested a review of India's GSP benefits, given Indian trade barriers affecting the US exports in those sectors.

India has implemented a wide array of trade barriers that create serious negative effects on US commerce, the USTR alleged.

“We hope that India, Indonesia, and Kazakhstan will work with us to address the concerns that led to these new reviews,” he said.

In October 2017, USTR announced a new triennial process to assess GSP beneficiary country eligibility and examined the country’s policies and practices related to each of the 15 eligibility criteria established by Congress, including respecting arbitral awards in favor of US citizens or corporations, combating child labor, respecting internationally recognized worker rights, providing adequate and effective intellectual property protection, reducing barriers to services trade and investment, and providing the US with equitable and reasonable market access.