India asks U.S. to renew GSP scheme

India has taken up the issue of immediate renewal of the US Generalised System of Preferences (GSP) programme, which is going to be expired on July 31. Any delay or failure to renew the programme will result in an adverse impact on trade exchanges between the two countries. Last time the GSP renewal by the U.S. was delayed by about three months. Though the time gap had been covered by retrospective effect in the administrative action, it had put both the U.S. importers and overseas exporters at a disadvantage for some time. In view of this, it is very important to get GSP renewal notified at the earliest.
The GSP programme helps developing countries expand their economies by increasing exports to the U.S. It also aids U.S. businesses by lowering the cost of imported goods that are used as inputs in value-added US production. U.S. jobs and corporate interests are equally linked to the renewal of the GSP programme.
In the Trade Policy Agenda released in March this year, the U.S. administration said that helping developing countries grow and expand their economies through trade also helps the U.S. by providing its exporters greater opportunity to sell products to billions of new consumers abroad. U.S. businesses imported $19.9 billion worth of products under the GSP programme in 2012, including many inputs used in U.S. manufacturing. The U.S. accounts for 16 per cent of India’s total services imports. Indian imports of US services will see a sharp increase in the coming years as India’s middle-class market grows larger and key services sectors see further reforms.
The U.S. Generalized System of Preferences (GSP) is a program designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 5,000 products when imported from one of 127 designated beneficiary countries and territories. GSP was instituted on January 1, 1976, by the Trade Act of 1974.
Products that are eligible for duty-free treatment under GSP include: most manufactured items; many types of chemicals, minerals and building stone; jewelry; many types of carpets; and certain agricultural and fishery products. Among the products that are not eligible for GSP duty-free treatments are: most textiles and apparel; watches; and most footwear, handbags, and luggage products.