New Delhi: The US has decided to withdraw duty benefits on $5.6 billion worth of exports from India by May this year, blaming the trade barriers created by the Indian government, after negotiations for a trade package fell through.
The GSP programme allows duty-free entry of 1,784 products from India into the US, benefitting exporters of textiles, engineering, gems and jewellery and chemical products.
"India has implemented a wide array of trade barriers that create serious negative effects on United States commerce. Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion," the office of the United States Trade Representative said in a statement late on Monday.
US commerce secretary Wilbur Ross recently raised concerns regarding new trade barriers created by India, hinting at the stringent e-commerce rules that affected US companies such as Amazon and Walmart-owned Flipkart.
In a hurriedly called press briefing, India's Commerce secretary Anup Wadhawan said disproportionate demands from the US led to the collapse of talks even though India was ready for greater market access in agricultural products to the US.
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).