India on Saturday called the decision of United States President Donald Trump to end preferential trade treatment for the country on June 5 unfortunate. Trump had made the announcement on Friday, claiming that India had not assured the US that it will “provide equitable and reasonable access to its markets”.
India’s Ministry of Commerce and Industry issued a statement, saying it will continue to build on the strong ties with the US. “India as part of our bilateral trade discussions, had offered resolution on significant US requests in an effort to find a mutually acceptable way forward,” the government said. “It is unfortunate that this did not find acceptance by the US.”
It further said: “India, like the US and other nations shall always uphold its national interest in these matters. We have significant development imperatives and concerns and our people also aspire for better standards of living. This will remain the guiding factor in the Government’s approach.”
The statement by the Centre also said that India hopes that the matter was part of a regular process that “gets resolved mutually from time to time”.
Congress spokesperson Randeep Surjewala said that the decision of the US was a “double whammy”. “India has decided to yield to the pressure of the US and stop purchasing crude oil from Iran,” he said, according to Hindustan Times. “Now our special trade status with the US is gone.”
Trump had announced his decision to remove India from the Generalized System of Preferences programme in March.
India is the biggest beneficiary of the GSP programme which allowed for $5.6 billion, around Rs 3,896 crore, worth of Indian exports to enter the country duty-free. Under the GSP programme, certain products can enter the US duty-free if beneficiary developing countries meet the eligibility criteria established by its Congress, according to The Indian Express.
India has reportedly planned to impose higher import duties on more than 20 US goods if it is dropped from the GSP programme. According to the US Trade Representative’s Office, the US goods and services trade deficit with India was $27.3 billion in 2017.
Trump has repeatedly called to reduce US trade deficits and protested against India’s high tariffs. He had first brought up the matter soon after taking office, during his inaugural address to a joint sitting of the US Congress in 2017, without directly naming India.
On May 3, 24 members of the US Congress had reportedly sent the Trump administration a letter, requesting it not to terminate India’s access to the programme, The Indian Express reported.
Commerce Secretary Anup Wadhawan had said in March that the move will not have any “significant impact” on India’s exports to the US. The “actual duty benefit” that India gets under the GSP is only $190 million annually, because India uses the concession for just 1,784 products out of the 3,700 covered, Wadhawan had then said.