At least 50 Indian goods hit as US revokes GST concessions
01 November 2018
A decision by the United States to revoke duty-free concessions on import under the Generalised system of preferences (GSP) will affect at least 50 Indian products, mostly from the priority sectors like handloom and agriculture.
The federal register issued a notification, listing out 90 products, which were so far subject to duty-free provisions under the GSP, marking the Trump administration's tough stand on trade-related issues
President Donald Trump today issued a presidential proclamation, leading to the removal of these products from the privilege beginning 1 November.
Henceforth these products "will no longer qualify for duty-free preferences under the GSP programme but may continue to be imported subject to regular Most Favored Nation duty-rates," PTI quoted an official of US trade representative as saying.
While the products that come under the presidential proclamation are not country specific, India being the largest beneficiary of the GSP, has been hit the most by the latest Trump administration move.
The GSP, the largest and oldest US trade preference programme, is designed to promote economic development by allowing duty-free entry for thousands of products from developing and poor countries.
India, which is the largest beneficiary of the GSP, had exported goods worth over $5.6 billon to the US duty-free last year.
While the exact volume of India's export to the US impacted by the latest move of the Trump administration is not known, the move would affect a large number of small and medium size businesses, particularly in the handloom and agricultural sectors.
Trump now wants to limit duty waivers to the GSP's Competitive Need Limitation (CNL) thresholds. The CNL thresholds are quantitative ceilings on GSP benefits for each product and designated beneficiary country.
Trump said he had determined in 2017 certain beneficiary developing countries exported eligible articles in quantities exceeding the applicable competitive-need limitations.
"I hereby terminate the duty-free treatment for such articles from such beneficiary developing countries," he said.
Products from other countries like Argentina, Brazil, Thailand, Suriname, Pakistan, Turkey, the Philippines, Ecuador and Indonesia have also been removed from the GSP list.
Indian products removed from the duty-free provisions of the GSP include dried pigeon pea seed, areca nuts, fresh or dried (in shell), turpentine gum, mangoes (prepared or preserved by vinegar or acetic acid), sandstone (merely cut into blocks or slabs of a rectangular), tin chlorides, barium chlorides, salts and esters of tartaric acid, nesoi, and trimethyl phosphite.
Full grain unsplit or grain split buffalo hide or skin; grain split whole buffalo leather, without hair, whole buffalo skin leather (not full grain unsplits/grain splits); and full grain unsplit buffalo leather (not whole), have also been removed from the duty free the GSP list.
Dyed, plain weave certified hand-loomed fabrics of cotton, containing 85 per cent or more cotton by weight; plain weave certified hand-loomed fabrics of cotton, containing 85 per cent or more cotton by weight, hand-loomed carpet and other textile floor coverings, not of pile construction, woven, made up of man-made textile materials have also been removed.
Base metal clad with gold mixed link necklaces and neck chains and keyboard musical instruments, like harmoniums and similar keyboard instruments with free metal reeds are among the other products.
These products can still be exported to the US from India but they will be subject to regular tariffs.
In April, the US announced eligibility review of India for the GSP. According to the USTR, the total US imports under GSP in 2017 was USD 21.2 billion, of which India was the biggest beneficiary with USD 5.6 billion, followed by Thailand (USD 4.2 billion) and Brazil (USD 2.5 billion).