India has taken up with United States the issue for immediate renewal of the legal authorisation of the US Generalised System of Preferences (GSP) programme, which expired on July 31 this year, to avoid any adverse impact on trade exchanges between the two countries.
Highly placed sources in the Commerce and Industry Ministry said that the Indian government had already brought to the notice of the U.S. administration the need to extend beyond July 31 through September 2015 for the GSP programme. The matter was also recently raised by the Commerce and Industry Minister Anand Sharma during his visit to Washington last month. ``Presently the U.S. Congress is debating the issue and we expect the nod for the extension of the GSP programme till September 2015 to come through very shortly,’’ a senior official remarked.
Experts are of the view that timely renewal of GSP is very important for maintaining stable bilateral trade between the two countries and to avoid uncertainty in quoting/bidding for any new business which will adversely affect the trade.
The GSP programme helps developing countries to expand their economies by increasing exports to U.S. and it also aids U.S. businesses by lowering the cost of imported goods that are used as inputs in value-added U.S. production. Therefore, it helps in keeping products `made in America’ competitive for both domestic consumption as well as U.S. exports. The U.S. jobs and corporate interests are equally linked to the renewal GSP programme.
CII Foreign Trade committee chairman Sanjay Budhia said last time the GSP renewal by the U.S. was delayed about three months. ``Though the time gap had been covered by retrospective effect in the administrative action, it had put both 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,’’ he remarked.
U.S. businesses imported $19.9 billion worth of products under the GSP programme in 2012, including many inputs used in U.S. manufacturing. 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 U.S. by providing its exporters greater opportunity to sell products to billions of new consumers abroad.
Contrary to popular perception, India is not just an exporter of services to the U.S. Rather, it is a significant importer as well. The US accounts for 16 per cent of India’s total services imports. ``Indian imports of U.S. services will see a sharp increase in coming years as India’s middle-class market grows larger and key services sectors see further reforms,’’ he added.
