US President Donald Trump has decided on Monday that he will name India out of the list of countries which are taking advantage of the general tax-free provisions (GSP) program. This benefit is raised on products that are exported to the US.
According to US law, these changes will be effective from two months after notification is issued. Countries in this list are given special preference. America does not charge on imports of a fixed amount from the countries included in the list.
Trump says that he has taken this decision because India is no longer following legal eligibility criteria. Since the GSP program began in the year 1970, India has been taking advantage of it. India has been its biggest beneficiary. This decision will have a big impact on India. This program is America’s largest and American Business Priority Program.
Thousands of countries in its list were brought to promote economic development by allowing tax-free exemption in the United States. Trump says that he has taken this decision because he has not been able to get the assurance from India that he will give equal amounts to American products in his market. They say that due to restrictions in India, it is causing business loss. India has failed to meet the criteria of GSP. In the past year, the United States began reviewing the terms set for GSP in April.
Apart from India, the name of Turkey has also been excluded from this list. Earlier, last year, Trump had exempted the duty-free concession on 50 products imported from India.
Issuing a notification, information was given to exclude 90 products that were exempted from the import duty under GSP. The 50 Indian products included in the list were also excluded from the tax-exempt rebate on imports.
What will be the impact on India?
In the US GSP program, beneficiary countries do not have to pay any import duty to the US. Under this program, India gets exemption of exports of 5.6 billion dollars (40 thousand crores). India will not get these benefits after being out of the program.
What is the US GSP program?
So far, India was considered as the largest beneficiary country under GSP, but this action of the Trump administration is showing tough attitude on New Delhi with its trade related issues. GSP was created to promote economic development by allowing thousands of products coming from different countries to allow duty free access. In the last year the discontinuance of duty free import of the products, which included 50 products in India, were included. Explain that in the year 2017, India had exported tax-free over $ 5.6 billion to the United States under GSP.
Threatened Than Last Week
Donald Trump had said on Saturday that India is a high-duty country, and now they need to do trump (reciprocal) or at least some other tax. Trump said this while addressing the Conservation Political Action Conference (CPAC) organized in Washington DC, Maryland. He said, “India is a high duty country and charges a lot from us.”
Trump said, “When we send a motorcycle to India, it is 100 percent charged, when India sends a motorcycle to us, they charge 100 percent, but we do not charge them.”
They said, “I say, the colleagues, listen, they are charging us 100 per cent.” For the same product, I want to recover 25 per cent from them. I think 25 per cent will also be foolish, it should be 100 per cent. But I’m going to do it for you 25 percent. I want your support. “