Many nations offer India GSP benefits, but US move will affect competitivenesshttps://indianexpress.com/article/business/many-nations-offer-india-gsp-benefits-but-us-move-will-affect-competitiveness-many-nations-offer-india-gsp-benefits-but-us-move-will-affect-competitiveness-5796256/

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

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.

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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.

Even as the United States has withdrawn preferential tariff benefits to India, provoking New Delhi to impose retaliatory tariffs on many imports of American goods, India continues to enjoy tariff preference from many countries including Australia, Russia and Japan, as well as the European Union (EU), among others.

Indian exports to these countries was nearly five times the total exports to the US in 2018, with the country exporting $6.3 billion worth of goods to the US under GSP in 2018 and availing duty concession to the tune of $240 million last year. Effective June 5, 2019, the US terminated its preferential tariffs being granted to India under the Generalized System of Preferences (GSP) Scheme.

However, exports to other countries offering preferential tariffs continues to grow. For instance, Indian exports to 28 countries in the EU under the GSP scheme rose to $25.96 billion in 2018, up from $23.93 billion in 2017 and $20.76 billion in 2016.

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.

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Exports from India to Japan under preferential tariff arrangement were at $1.71 billion in 2018, as compared to $1.81 billion in 2017 and $1.61 billion in 2016. Exports to Russia rose to $478.68 million in 2018, from $426.56 million in 2017 and $430.69 million in 2016. Exports to Australia were at $445.76 million in 2018, as against $389.74 million in 2017 and $319.66 million in 2016.

Apart from these countries, exports to New Zealand, Belarus and Kazakhstan were at $29.05 million, $21.25 million and $5.72 million in 2018, respectively.

“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,” Commerce and Industry Minister Piyush Goyal had said Friday in a reply to a question in the Rajya Sabha.

“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,” he said.

Explained

Exports of 1,900 products to now face duties burden

India has been a beneficiary of the US’ GSP programme since November 1975, under which beneficiary countries are allowed to export thousands of products to the US without the added burden of duties. As exports under GSP accounted for over 11 per cent of India’s total goods exports of .4 billion to the US in 2018, the withdrawal 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.

As a beneficiary of the GSP — one of the largest and oldest trade preference programmes by the US — since November 1975, India could export thousands of products to the US without the added burden of duties.

As exports under GSP accounted for over 11 per cent of India’s total goods exports of $54.4 billion to the US last calendar year, the withdrawal could affect India’s competitiveness in exports of 1,900 products, including organic chemical raw materials, iron, steel, furniture, aluminium and electrical machinery, as duties will now be levied on these items.

In response to higher tariffs imposed by Washington on many Indian products, India last week announced a hike in customs duties on as many as 28 US products, including almond, pulses and walnut. The increased customs duties came into effect from last Sunday.