President Donald Trump has decided to end a trade concession program for India, under which New Delhi exported nearly $5 billion of goods to the United States.
The Administration’s decision to terminate the Generalized System of Preferences for India from June 5 follows the South Asian country’s policy of protectionism which refuses to give America “reasonable access” to the Indian market.
Washington’s GSP program helps chosen developing countries with grant of preferential trade access to the American market.
Reversing years of trade concession programs, President Trump has made it clear that the United States would not tolerate unfair trade imbalance and follow a reciprocal course to fix the wrongs in America’s international trade.
The Trump Administration recently terminated the same program for Turkey.
The move to cancel trade concessions for India times with Prime Minister Narendra Modi’s reelection and comes amid declining India economic growth rate. Indian textile, agricultural and auto products will reportedly take the hit with the end of the program.
The termination of program for New Delhi will complicate Modi’s agenda as its exporters will no longer be able to have a special access to the U.S. market. According to The New York Times, Indian exports to the U.S. last year totaled83.2 billion including GSP-covered goods worth $5 billion.
The previous U.S. Administrations have used bilateral trade concessions as a massive foreign policy tool to expand Washington’s influence.
