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Generalized System of Preferences (GSP)
Why is it in the news ?
- The United States has announced its intention to terminate India’s designation as a beneficiary of its Generalised System of Preferences (GSP).
More in the news
- The announcement to withdraw duty benefits on $5.6 billion worth of exports from India by May this year.
- US blamed the trade barriers created by the Indian government, after negotiations for a trade package fell through.
- US claimed that India has not assured equitable and reasonable access to its markets.
- The GSP programme allows duty-free entry of 1,784 products from India into the US
- Exporters of textiles, engineering, gems and jewellery and chemical products benefit the most from this programme.
Background:
- In April last year, the USTR announced that it was reviewing the GSP eligibility of India, after the US dairy industry and the US medical devices industry requested a review of India’s GSP benefits, given India’s alleged trade barriers affecting US exports in these sectors.
- Total US imports under GSP in 2017 was $21.2 billion, of which India was the biggest beneficiary with $5.6 billion, followed by Thailand ($4.2 billion) and Brazil ($2.5 billion).
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.
- 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.