White House Announces Termination of India’s GSP Status

Following the White House’s removal of Turkey from the countries eligible for GSP (Generalized System of Preferences) status last month, the Trump administration declared that India has been deemed ineligible for continued inclusion as a beneficiary under the duty-free trade program.

On the GSP list since November 1975, India was the program’s largest beneficiary, with $83.2 billion in products sent to the United States during 2018, according to the Office of the U.S. Trade Representative.

President Donald Trump said India was removed because it didn’t assure that the United States had equitable and reasonable access to its markets.

The GSP was established by the Trade Act of 1974 and went into effect Jan. 1, 1976, to aid countries located in developing regions by allowing duty-free importation of thousands of products into the United States.

Many trade experts in the United States opposed India’s removal and the country benefited greatly from the program. Dan Anthony, executive director of the special-interest group Coalition for GSP,said. India was willing to work with the United States to avoid removal from GSP consideration.

According to Anthony, new tariffs would hurt companies in the United States that import goods from India, particularly those that have 10 to 30 employees. Anthony sees the scaling down of GSP eligibility as a harmful trend for United States businesses.

While finished apparel and many textiles don’t qualify under GSP status, Anthony said there have been recent discussions to change these statutes.

“There are a number of conversations going on right now in D.C. and congressional offices about removing that prohibition on apparel and footwear,” he said. “If that comes to be and Congress passes it, India is a major supplier—you would want them in rather than out.”

India’s GSP status was eliminated June 5. The country is expected to implement retaliatory tariffs on products imported from the United States beginning June 16.