India Enjoys GSP Benefits From Other Countries
- 24 Jun 2019
Even after US withdrawal of Generalised System of Preferences (GSP) benefits to India, the country continues to enjoy GSP benefits from other countries.
Relevance of the News: The news explains India’s trade dealings with other countries under preferential trade conditions or programmes like the GSP.
GSP Benefits:
- As per WTO, India is a beneficiary of GSP provided by Armenia, Australia, European Union, Japan, Kazakhstan, New Zealand, Norway, Russian Federation, Switzerland and Turkey.
- Indian exports to these countries were nearly five times the total exports to the US in 2018.
- Although US has withdrawn benefits given to India the exports from India to other countries continues to grow under GSP.
Effect of US GSP Withdrawal:
- The US has terminated its preferential tariffs being granted to India under the Generalized System of Preferences (GSP) Scheme from 5th June 2019 following which India has placed duties on 28 products.
- Exports under US GSP accounted for over 11 per cent of India’s total goods exports to the US last year.
- The withdrawal could affect India’s competitiveness in exports of 1,900 products, including organic chemical raw materials, iron, steel, furniture, aluminium and electrical machinery, as duties will now be levied on these items.
- However, India has downplayed the effect of US GSP benefit withdrawal saying that the effect would be insignificant owing to limited benefits it offered.
