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Tariff hike to hit exports to U.S.

Trump notifies U.S. Congress on ending GSP benefits, cites Indian trade barriers

U.S. President Donald Trump has announced that he intends to end preferential trade terms for India under the U.S.’s Generalized System of Preferences (GSP) programme. His intent was conveyed in a letter sent to the Speaker of the U.S. House of Representatives and President of the Senate.

The GSP programme, which sets zero tariffs for certain goods from a set of 121 developing countries to foster their trade and economic development, accounts for some $5.6 billion of India’s exports to the U.S., making India the largest GSP beneficiary. Chemicals, gems and jewellery, engineering and textiles are among the Indian industrial sectors that benefit from GSP.

“I am taking this step because, after intensive engagement between the United States and the Government of India, I have determined that India has not assured the United States that it will provide equitable and reasonable access to the markets of India…” Mr. Trump’s letter, which was shared with reporters, said.

From the U.S. perspective, a total of about $21 billion in imports entered the U.S. duty-free under GSP in 2017, of a total of $2.3 trillion in imports, according to the Congressional Research Service.

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