Many nations offer India GSP benefits, but US move will affect competitiveness

6 min read
  1. United States has withdrawn Generalized System of Preferences (GSP) Scheme to India provoking India to impose retaliatory tariffs on many imports of US goods.
  2. However,India still continues to enjoy tariff preference from many countries including Australia,Russia and Japan as well as the European Union (EU) among others.
  3. Further,within the group of countries that provided GSP benefit to India, exports to EU nations were highest followed by the US,Japan, Russia and Australia,respectively.
  4. GSP is a preferential tariff system extended by developed countries to developing countries.It is a preferential arrangement in the sense that it allows concessional low/zero tariff imports from developing countries.
  5. Some developed countries including European Union provide unilateral tariff preferences on exports from developing countries/least developing country under their Generalized System of Preferences Scheme.
  6. As per WTO,India is a beneficiary of GSP provided by Armenia, Australia, European Union,Japan,Kazakhstan,New Zealand,Norway, Russian Federation, Switzerland and Turkey.
  7. However,US withdrawal of GSP could affect India’s competitiveness in exports of 1,900 items including organic chemical raw materials,iron, steel,furniture,aluminium and electrical machinery as duties will now be levied on these products.

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