India seeks early renewal of GSP by US

Commerce Minister Anand Sharma talks of monetising gold assets to wipe out CAD.

Updated - November 16, 2021 08:51 pm IST

Published - August 28, 2013 06:50 pm IST

Commerce and Industry Minister, Anand Sharma on Wednesday said India was constantly engaged with U.S. for fast track renewal of Generalised System of Preferences (GSP) regime, which had expired on July 31, to enable duty-free imports from the country.

Although, the US has indicated that it was for renewal of GSP programme till September 2015, there is anxiety in the Indian administration over the delay in the renewal putting a question mark over exports to US. Pending the GSP renewal programme, exports from India are subject to U.S. import duties. “It has been taken up with US and followed up at the appropriate level. Surely it is engaging their attention and I hope that a positive view will be taken on the issue,’’ Mr. Sharma said.

Experts are of the view that the 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.

US businesses imported $19.9 billion worth of products under the GSP programme in 2012, including many inputs used in 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.

Mr. Sharma, seeking to put an out of the box idea, said the country could monetise its gold assets to take care of the current account deficit (CAD). “It is for the banking secretary, bankers and the RBI to see how to monetise gold from the gold assets of the country. Even if 500 tonnes is monetised, then in today's value, I think it takes care of CAD,’’ Mr. Sharma remarked during the Board of Trade meeting.

Further Mr. Sharma said the decision on monetising gold was beyond his jurisdiction but he was only pointing towards a direction that could be taken to deal with the present situation. “We have to think out of the box in the current situation which was challenging,’’ he added. At current market rates, 500 tonnes of gold is valued at about $25 billion. Globally, demand for gold in April-June was 856 tonnes, down 12 per cent from a year earlier, according to the World Gold Council.

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