USA, India and GSP

Recently, US President Donald Trump has ended India’s preferential trade treatment under generalized system of preferences (GSP) that allows $5.6 billion worth of Indian exports to enter the United States duty free.

According to the United States Trade Representative, India’s termination from the GSP programme follows “its failure to provide the United States with assurances that it will provide equitable and reasonable access to its markets in numerous sectors”.

What is GSP?

Generalized System of Preferences is a preferential tariff system extended by developed countries to developing countries (preference receiving countries or beneficiary countries). It is a preferential arrangement in the sense that it allows concessional low or zero tariff imports from developing countries.
GSP involves reduced or zero tariffs of eligible products exported by beneficiary countries to the markets of GSP providing countries.
According to the Office of the United States Trade Representative, US GSP program provides opportunities for many of the world’s poorest countries to use trade to grow their economies and climb out of poverty.
The products covered under GSP are mainly agricultural products including animal husbandry, meat and fisheries and handicraft products. These products are  generally the specialized products of the developing countries.
It intends to provide economic access to developing countries by removing import tax barriers and increasing their trade with the US.
The GSP also helps keep American companies competitive because it allows cheaper imports into the market and gives the American consumer a greater degree of choice.
Currently, there are 120 beneficiary countries in the American GSP, including Pakistan, Sri Lanka, and Afghanistan.


Location: Thiruvananthapuram, Kerala, India

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