Anup Wadhawan said India now is looking at a non-GSP trade pact with America.
New Delhi: The government of India said that Donald Trump’s move to end preferential treatment will have very little impact.
Under what is known as the Generalised System of Preferences or GSP, India enjoys duty-free entry for up to USD 5.6 billion worth of its exports to the United States.
India’s Commerce Secretary Anup Wadhawan said that India felt it had come at a fairly reasonable stand balancing US aspirations with their own concerns which didn’t quite work on their end. He said India now is looking at a non-GSP trade pact with America.
“There will surely not be any significant impact on our exports or any statistical edge to our competitors,” Wadhwan said, adding that India charges tariffs well in line with standards set by The World Trade Organization.
The only benefit arising out of this decision will be for goods and exports worth around 190 million dollars, moderate enough to the total volume of trade, the Commerce Secretary added.
The most impacted products will be raw materials and intermediary goods across sectors, mainly organic chemicals.
India considerably capped the pricing of medical devices such as knee caps and stents last year, reducing it to as much as 60 per cent. US services a majority of the Indian medical devices market and only recently domestic medical equipment makers have started to report higher sales after the price cap.
‘We don’t really agree that India is a high-tariff nation’, Wadhawan said countering a statement made by Donald Trump a few months ago when he said that India is high-tariff country.
Another government official requesting to not be named said that GSP is more symbolic to the strategic relationship, and not really in terms of the value.
US tariffs are already low so the benefits to the industry will naturally be low, he told Reuters.
“In addition to this, United States had extra demands which could not be accepted. Due to this the talks stalled and it didn’t end favourably,” said the Commerce Secretary.
"In April 2018, the US initiated a review of our GSP benefits, mainly on two industries medical devices and dairy. But then the US authorities added other issues such as market access, relaxation of various procedural requirements, testing requirements etc. So it became a fairly broad-based review covering a large number of trade issues." the ministry said.
Inspite of this, he is still hopeful of further favourable talks with America and says everything is there to be considered.