Suspension of preferential trade status for India under GSP is "done deal": US

The US is not going to reverse its decision to terminate India's designation as a beneficiary developing nation under the key GSP trade program with a senior Trump administration official terming the suspension a "done deal".

The official also reiterated that India needs to address some of America's major concerns, in particular, those related to market access and data localisation.

The Generalized System of Preference (GSP) is the largest and oldest US trade preference program and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.

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On March 4, President Donald Trump announced that the US intended to terminate India's designation as a beneficiary developing country under the GSP program.

The 60-day notice period ended on May 3. A formal notification is now expected anytime.

The Trump administration has prioritised working with the Government of India to ensure that US companies have a level playing field, a senior State Department official told reporters on Thursday, May 30 hours after Narendra Modi was sworn in as Prime Minister for a second time following his spectacular electoral victory in the general elections.

"The persistent market access issues, which we were engaged with our Indian counterparts over the last year, led us to announce in March that we would be suspending or withdrawing India's benefits under the generalized system of Preferences Program," the US official, who spoke on the condition of anonymity, said.

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"That suspension is a done deal. Now the task is how do we look ahead; how do we work under the second Modi administration, to identify a path forward?" the official said, reflecting the Trump administration's decision that the GSP termination is final.

Under the GSP program, nearly 2,000 products including auto components and textile materials can enter the US duty-free if the beneficiary developing countries meet the eligibility criteria established by Congress.

India was the largest beneficiary of the program in 2017 with USD 5.7 billion in imports to the US given duty-free status and Turkey the fifth largest with USD 1.7 billion in covered imports, according to a Congressional Research Service report issued in January.