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India might counter US move on GSP withdrawal: TPCI

Updated: Jun 03, 2019 10:01:11am
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India might counter US move on GSP withdrawal: TPCI

New Delhi, June 3 (KNN) Asserting that India is firmly planning to counter the US decision to withdraw GSP on Indian goods by imposing retaliatory tariffs from the coming month, the Trade Promotion Council of India (TPCI) said the industry estimates USD 290 million additional burden on USA on items exported to India.

Mohit Singla, Chairman TPCI said, “India might counter the US decision to withdraw GSP on its exports by imposing retaliatory tariffs from the coming month. If the Indian government goes ahead with retaliatory tariffs, twenty-nine items imported from the US, including walnuts, lentils, boric acid and diagnostic reagents, among others will face higher duties, cutting benefits to US exporters.”  

Singla said that the large difference between India’s actual average tariffs and its MFN trade-weighted applied average tariffs arises primarily because of the several exemptions and concessions that the country provides on its MFN tariffs.

He said that India is a robust market and its economic fundamentals are on sound. The withdrawal of GSP will not make much difference as Indian exports are all geared to take this challenge. Even the US was benefiting from the GSP regime, since the intermediary inputs provided by India helped keep its industry competitive.

This withdrawal of GSP is only going to inject the estimated, additional burden of USD 190 million, which is miniscule compared to India overall export to US, he added.

India’s top exports to the US under GSP in 2017 included; motor vehicle parts, ferro alloys, precious metal jewellery, building stone, insulated cables, leather products, garment (marginal) and wires. Out of US$ 36 billion of exports to the US by India, US$ 5.7 billion worth of exports will be affected, marginally impacting US trade deficit with India.

Also India’s trade surplus for merchandise goods with the USA is around US$ 18-19 billion. Also, most of the exports are of intermediate goods not produced in the US.

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