Today, The United States Abolished The Treatment Of GSP In India.

US President Trump announced on the 31 day that the US government will officially abolish the GSP treatment granted to India in June 5th. This move will lead to a more tense trade relationship between the US and India.

Trump issued a presidential announcement the same day, saying that because India failed to ensure fair and reasonable market access to the United States, the United States government will terminate its GSP treatment under the authorization of the trade law 1974.

GSP refers to a system of international trade which unilaterally faces the preferential treatment of goods and semi manufactured goods imported from developing countries by the developed countries. It is a more preferential treatment on the basis of the most favored nation treatment rate.

In early March this year, the US trade representative office issued a statement saying that the US government plans to cancel the GSP treatment granted to India and Turkey. In accordance with the law, the abolition of the GSP treatment can only take effect at least 60 days after notifying the US Congress and the governments concerned.

The US government launched a review of India in April 2018. The United States believes that a series of trade barriers in India will have a serious negative impact on us business. Despite intensive contacts between the two governments on related issues, they failed to reach agreement.

The United States Trade Representative Office data show that as of 2017, about 5 billion 600 million U. S. dollars for goods exported to India enjoy the GSP treatment, and India is the biggest beneficiary of the system. In 2018, the total imports of goods from India amounted to US $54 billion 400 million, and exports to India amounted to US $33 billion 100 million, with a trade deficit of US $21 billion 300 million.

In addition, the US Trade Representative Office announced early last year that it would exempt some developing countries such as India when it imposed protective tariffs on imported washing machines and photovoltaic cells and components. But in a May 31st announcement, Trump said India would no longer enjoy the exemption.