GTRI Urges India to Shift Focus from GSP Benefits to Broader US Trade Ties

New Delhi, Oct 1 (KNN) In a recent analysis, Global Trade Research Initiative (GTRI) has advised India to accept the withdrawal of benefits under the US Generalised System of Preferences (GSP) program and refrain from pushing for its reinstatement.

The think tank suggests that the benefits for Indian exporters under the GSP scheme were marginal, and India’s focus should shift towards more strategic and long-term trade discussions with the US.

The GSP scheme, initiated by the US in 1974, allowed duty-free access to specific products from developing nations, giving them a competitive edge in the American market.

However, GTRI's founder Ajay Srivastava pointed out that the impact on India's exports was limited. "Only about 16 per cent of India’s exports to the US benefited from GSP, and these were primarily in sectors like leather, auto components, and chemicals.

The advantages were minor when compared to the broader scope of the India-US trade relationship," he said.

Srivastava noted that in 2019, less than 2 per cent of India’s exports to the US enjoyed GSP benefits. For every USD 100 of goods exported, only 12 per cent entered under the scheme.

The program, designed primarily for low-income countries, excluded major economies like China. India, as a rising economic power, should now look beyond these marginal concessions and focus on larger trade partnerships, he argued.

Commerce and Industry Minister Piyush Goyal is set to visit Washington for the upcoming India-US Commercial Dialogue on October 2, co-chaired by US Secretary of Commerce Gina Raimondo.

GTRI believes this is an opportune moment for India to prioritize investment opportunities, supply chain resilience, and bilateral partnerships, rather than seeking the GSP's revival.

India remains the largest user of the GSP program, with exports of USD 5.7 billion under the scheme, but this is negligible in the context of the overall USD 190 billion annual trade between India and the US.

Recent trade data reveals that India’s merchandise exports to the US grew by 9.3 per cent in 2024, while imports from the US declined by 5 per cent. India should leverage this growth to build stronger, strategic trade ties, Srivastava emphasized.

In conclusion, as India strengthens its global economic position, GTRI suggests that the country focus on more substantial trade agreements, moving beyond the limited benefits of the GSP program.

(KNN Bureau)