Decision to cut India from preferential trade program ‘a done deal’ – U.S. official

Prime Minister Narendra Modi has just embarked on his second term in office, but it starts with a potential headache regarding its trade with the U.S.

An official from the State Department on Thursday has revealed that the U.S. will not be retreating on its decision to end a preferential trade deal with India. The official said the decision to end the pact was a “done deal.”

In March, the U.S. President Donald Trump declared that he would terminate India’s privilege to use the largest and oldest Generalized System of Preferences (GSP) trade program. He claimed that the U.S had been denied India’s market access hence the action.

GSP is a program that enables developing countries to have duty free export of goods to the U.S. The notice would take 60 days from the day notification is issued to the Congress according to U.S. law. On the expiry of the 60 days, the U.S. can purge India from participating in the program. The notification reached the Congress at the beginning of March.

The official whose identity is concealed said the GSP suspension is bound to happen. According to him, the move is to balance trade field by ensuring there are fairness and equitable market access.

However, it is not all lost as India can redeem itself through giving U.S. companies just and equitable market access and therefore, ensure benefits to all.

Furthermore, the official advice that a well-laid plan should be laid down before engaging on any discussion with trade allies to make sure an amicable solution is arrived at. India ought to be ready for negotiations that will bear fruits.

Additionally, more emphasis should be put when addressing issues like data localization, e-commerce measures which were key hindrances to international investment for some of the best companies. With that, fruitful and favorable progress is guaranteed.

Since the 1970s, one of the greatest beneficiaries of GSP is India globally. Being evicted from participating in the trade program would hit India hard.

Twenty- four U.S. members of Congress are leading calls to have India retained on the program. Earlier this month, the legislators wrote to the administration on May 3 requesting the planned suspension be withdrawn.