Donald Trump plans to end India's preferential trade treatment

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File photo of U.S. president Donald Trump and Prime Minister Narendra Modi.

The Indian government on Tuesday downplayed the effect of the decision by the United States government to withdraw trade concessions granted to India under the Generalised System of Preferences (GSP), with Commerce Secretary Anup Wadhawan saying that the impact would amount to $190 million on total export amount of $5.6 billion to the US.

Under the United States GSP programme, certain products can enter the U.S. duty-free if the beneficiary developing countries meet the eligibility criteria established by Congress. Announcing the termination, Trump said India had "not assured" the United States that it would "provide equitable and reasonable access" to its markets.

India, Donald Trump had said a few days ago, was "a high-tariff country".

India exports $5.6bn worth of goods to the USA duty free, making the South Asian nation the world's largest beneficiary of the GSP programme.

India is the largest beneficiary of the GSP programme and ending its participation would be the strongest punitive action against India since 2017, when Trump took office.

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In a letter to Speaker of the US House of Representatives Nancy Pelosi, Trump said he was determined that New Delhi had "not assured" the US that it would "provide equitable and reasonable access" to the markets of India.

Reuters last month reported the planned usa action, which comes as the United States and China appear close to a deal that would roll back us tariffs on at least $200 billion worth of Chinese goods.

"US intention to discontinue GSP benefits to India will not have a large impact".

Under the GSP programme, certain products can enter the United States duty-free if the beneficiary developing country meets a set of criteria established by congress.

"We don't agree that India is a high-tariff country", Mr Wadhawan said, countering the charge. "GSP is more symbolic of the strategic relationship, not in value terms", another government official, requesting anonymity, told news agency Reuters.

The decision to remove India was directed by the USA president.

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The commerce secretary said the U.S. had "extra demands" which could not be catered to, adding that talks with the USA did not end favourably.

It said in August it was reviewing Turkey's eligibility in the program after Ankara imposed retaliatory tariffs on USA goods in response to American steel and aluminium tariffs. The rules caused severe disruptions for Amazon and Flipkart, which is majority-owned by the U.S. retail giant Walmart.

Another opposition came from the medical sector based on price controls on medical devices imposed by India.

That followed a drive by New Delhi to force global card payments companies such as Mastercard Inc and Visa Inc to move their data to India and higher tariffs on electronic products and smartphones. "Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion".

India, however, "has implemented a wide array of trade barriers that create serious negative effects on United States commerce", the statement said.

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