InvestorQ : What does it mean for India since Donald Trump has withdrawn special trade status for India? How will it impact our trade with the US and other countries?
Juvina Maggie made post

What does it mean for India since Donald Trump has withdrawn special trade status for India? How will it impact our trade with the US and other countries?

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Angel dcosta answered.
2 years ago
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If you recollect, Trump had announced on March 04th that he would terminate the Generalized System Preferences (GSP) with India within a period of 60 days. With the period of 60 days ending on May 03rd Trump has announced the official lifting of the special status accorded to India. India exports goods worth nearly $5.7 billion every year to the US under the GSP. That trade will surely get effected, although that is still a very small part of India’s total exports of nearly $280 crore (just about 2%). But the fact that the US has withdrawn the GSP despite India agreeing to support the US in abiding by Iran sanctions could have larger implications.

The GSP provides duty-free entry to products from emerging nations so as to encourage exports in these countries and ensure that Americans get products at a cheaper cost. However, the US has constantly protested that India has not given adequate access to the American companies into the Indian markets. This view became more pronounced after the new ecommerce policy was clearly weighted against the large American online players like Amazon and Wal-Mart (which is the majority owner of Flipkart). Just read the specific statement of Trump, "I have determined that India has not assured the US that it will provide equitable and reasonable access to its markets. Accordingly, it is appropriate to terminate India's designation as a beneficiary developing country effective June 5, 2019.”

In terms of specific products, the GSP program gives special concessions to a number of Indian products which include auto components and textile materials among others. In fact, many lawyers, on behalf of US corporates, were lobbying for continuing the GSP for India. That is because the withdrawal will lead to higher costs to the tune of $300 million for American companies.

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2 years ago
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The Trump Govt policy has been to boost the American Businesses by blocking the preferential status to other foreign countries through tariffs. India is one of them and it will definitely affect the cost viability of Indian exports into US. Since our major export to US is software, It will be interesting to see how the large corporations will mange the tariff.
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