The US has decided to review India’s eligibility to enjoy duty-free access for certain products in the American market under a tax benefit scheme.

As many as 3,500 Indian products from sectors such as chemicals and engineering get duty-free access to the US market under the Generalized System of Preferences (GSP), introduced in 1976.

The office of the US trade representative (USTR) on Thursday said it was reviewing the eligibility of India, Indonesia and Kazakhstan under the GSP, based on “concerns about the countries’ compliance with the program".

The reviews are based on the Donald Trump administration’s new GSP country eligibility assessment process, as well as GSP country eligibility petitions. For India, the GSP country eligibility review is based on concerns related to its compliance with the GSP market access criterion, the USTR said in a statement.

“GSP provides an important tool to help enforce the Trump administration’s key principles of free and fair trade across the globe. The president is committed to ensuring that those countries who receive GSP benefits uphold their end of the bargain by continuing to meet the eligibility criteria outlined by Congress," deputy US trade representative Jeffrey Gerrish said.

“We hope that India, Indonesia, and Kazakhstan will work with us to address the concerns that led to these new reviews," he added.

GSP is a trade preference programme that the US government offers to exporters from other countries to promote economic development by allowing duty-free entry of goods. Under the GSP, Indian exports to the US enjoy lower import tariffs compared to those imposed on non-GSP exporters.

The US has been pressing India not to extend price caps on medical devices and wanted India to allow firms to withdraw products from the market if they do not wish to sell at government-determined rates.

In September, USTR Robert E. Lighthizer wrote to commerce minister Suresh Prabhu and the Prime Minister’s principal secretary Nripendra Misra pointing out that the pricing policy had created serious problems for US stent makers in India.

He also urged India not to extend caps to other devices. The matter was also discussed during Prime Minister Narendra Modi’s visit to Washington in June.

American medical device makers had also asked the USTR to suspend or withdraw India’s benefits under GSP.

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