ZCZC
BCN-28
INDIA-US-ECONOMY-TRADE
US cuts off India preferential trade access
WASHINGTON, June 1, 2019 (BSS/AFP) – The United States will end preferential
trade treatment for India from Wednesday, US President Donald Trump has
announced, in a fresh economic headwind for New Delhi alongside slowing
growth and record unemployment.
India has been the single biggest beneficiary of the decades-old US
Generalized System of Preferences programme, allowing the country to export
$5.7 billion worth of duty-free goods in 2017, according to figures from US
Congress.
Trump said in a statement issued late Friday that he wanted greater access
for US goods to the giant South Asian nation.
“I have determined that India has not assured the United States that India
will provide equitable and reasonable access to its markets,” Trump said.
“Accordingly, it is appropriate to terminate India’s designation as a
beneficiary developing country.”
Trump announced in March that he would be ending the preferential trade
accord with India, but did not give a date.
Washington has sought to make India a closer diplomatic ally, but has long
complained about limited access to the huge market of 1.3 billion people.
The US had a $26.7 billion trade deficit with India in 2017-2018.
The announcement is the latest headwind to threaten the Hindu nationalist
government led by Prime Minister Narendra Modi, who was re-elected to his
second term in a landslide just weeks ago after campaigning partly on his
record as an economic reformer.
Official figures released Friday showed that India’s growth slowed for the
third straight quarter to 5.8% in January-March, while unemployment hit a 45-
year high in 2018.
The Indian government made no immediate comment on Washington’s move, but
media reports said New Delhi was considering higher import duties on more
than 20 US goods including agricultural produce and chemicals.
Indian commerce secretary Anup Wadahan played down the move to end the
country’s GSP status in March, saying that preferential trade accounted for a
fraction of its nearly $80 million in annual exports to the US.
BSS/AFP/SR/1820 HRS