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US move is unfortunate: India reacts to Donald Trump's decision on Preferential Trade Status

US move is unfortunate: India reacts to Donald Trump's decision on Preferential Trade Status

| @indiablooms | 01 Jun 2019, 10:07 am

Washington, June 1 (IBNS): As US President Donald Trump has announced his country will end Preferential Trade Status for India, the PM Narendra Modi-led government on Saturday said the nation will "always uphold its national interest" in trade matters as "our people also aspire for better standards of living".

India also described the step taken by the US as 'unfortunate'.

"The United States of America (USA) has w.e.f. 5 June 2019 withdrawn India’s GSP benefits. These are unilateral, non-reciprocal and non-discriminatory benefits extended by some developed countries to developing countries. India as part of our bilateral trade discussions, had offered resolution on significant US requests in an effort to find a mutually acceptable way forward. It is unfortunate that this did not find acceptance by the US," read a government statement.

"India, like the US and other nations shall always uphold its national interest in these matters. We have significant development imperatives and concerns and our people also aspire for better standards of living. This will remain the guiding factor in the Government’s approach," it said.

"In any relationship, in particular in the area of economic ties, there are ongoing issues which get resolved mutually from time to time. We view this issue as a part of this regular process and will continue to build on our strong ties with the US, both economic and people-to-people. We are confident that the two Nations will continue to work together intensively for further growing these ties in a mutually beneficial manner," the government said.

Trump said it will end Preferential Trade Status for India which "didn't assure the US equitable and preferential access to market", media reports said.

Trump said India's designation as a beneficiary developing country under the preferential trade programme will end from Jun 5.

"I have determined that India has not assured the United States that India will provide equitable and reasonable access to its markets. Accordingly, it is appropriate to terminate India's designation as a beneficiary developing country effective June 5, 2019," Trump said in a White House statement, citing the Trade Act of 1974.

On Mar 4, Trump had announced to end India's designation as a beneficiary developing country under the GSP programme.

Under the GSP programme, around 2,000 products can enter the US without any duty.

India was the biggest gainer under the programme with an import to the US worth $5.7 billion.

However, India said the withdrawal of the status will not impact much as the benefits were worth $190 million.

As of 2017, some 5.6 billion US dollars' worth of Indian imports enjoys duty-free status in accordance with the GSP, making the country the biggest beneficiary of the program, data from the USTR's office showed.

In the statement, the US president also said he would remove India from the list of developing country World Trade Organization members exempt from tariffs on certain crystalline silicon photovoltaic (CSPV) products -- including modules, laminates, panels, and building-integrated materials -- and large residential washers.

Trump, who has complained about US trade deficit with India, issued a presidential proclamation last year removing 50 items from a list of Indian products subject to the GSP, effective from Nov 1, 2018. Washington has a 21-billion-dollar trade deficit with New Delhi in 2018, according to the US Census Bureau.

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