Why is it in the news ?
- Amid a widening dispute over its trade and investment policies, India could lose a vital US trade concession.
- Currently India enjoys zero tariffs on 5.6 billion dollars of exports to the United States of America.
More in the news
- Since US President Donald Trump took office in 2017, he is vowing to reduce the US deficit with large economies.
- Trump has repeatedly called out India for its high tariffs.
- A move to withdraw the Generalised System of Preferences (GSP) from India, the world’s largest beneficiary of a scheme, would be the strongest punitive action against India.
- Prime Minister Narendra Modi has courted foreign investment as part of his Make-in-India campaign to turn India into a manufacturing hub.
- Trump, for his part, has pushed for US manufacturing to return home as part of his Make America Great Again campaign.
- The trigger for the latest downturn in trade ties was India’s new rules on e-commerce that restrict the way Amazon.com Inc and Walmart backed Flipkart do business.
What is GSP?
- The Generalized System of Preferences (GSP) is a U.S. trade program designed to promote economic growth in the developing world.
- It provides preferential duty-free entry for up to 4,800 products from 129 designated beneficiary countries and territories.
- India’s case, GSP enables duty-free entry of 3,500 product lines in US markets.
- GSP was instituted on January 1, 1976, by the Trade Act of 1974.
- A wide range of industrial and agricultural products originating from certain developing countries are given preferential access to US markets.
Source
Indian Express.