The Indo-American Chambers of Commerce (IACC) has said that preferential trade status under the Generalised System of Preference (GSP) conferred over the last three decades between India and US should continue for enhancing trade between the two countries.
The termination of preferential trade status — which has significantly contributed to the growth of trade between the two countries — for India under GSP from June will negatively impact the Indian exports of goods to US which were earlier eligible for GSP benefit, members of the Western India Council of IACC said.
The key products/industries that will be majorly impacted include dairy products, items of gold or silver, chemical products, engineering sector and textile goods, participants at a roundtable said here on Wednesday.
Further, due to the rise in duty rates for aluminium/steel, exporters in India have suffered a setback and the Indian government has raised a retaliation claim to recover the cost to the tune of $241 million levied on steel/ aluminium exports, they said.
On the other hand, the impact on the US companies due to removal of GSP will cost American businesses over $ 300 million additional tariffs every year.
“New tax will result in job losses, cancelled investments and cost increases for consumers. US companies do not get access to the Indian market,” they said.
IACC proposed that new ventures may evaluate setting up of processing units in the United States, especially in areas like defence related textiles and clothing.
“This shall be a win-win situation for both the countries in a way that the basic raw materials such as yarn and fibre can be exported from India to US markets leading to value addition and employment in the US,” the industry body said.