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India may retaliate against US after Trump yanks country’s preferential trade status

India may retaliate against US after Trump yanks country’s preferential trade status
Indian authorities are mulling reciprocal measures to counter Washington’s unfriendly move to deprive the country of preferential trade status with the US, according to the chairman of India’s trade body.

On Saturday, US President Donald Trump ordered that India be excluded from the Generalized System of Preferences (GSP) program, starting June 5. Under the terms of the program, the country is able to export around $5.6 billion worth of its goods to the US duty-free.

“India might counter the US decision to withdraw GSP on its exports by imposing retaliatory tariffs from the coming month,” said the chairman of the Trade Promotion Council of India (TPCI) Mohit Singla.

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The move may target some twenty-nine items shipped to India from the US, according to the trade official. The list will reportedly include walnuts, lentils, boric acid and diagnostic reagents and other products.

“The industry estimates this move will impose an additional burden of $290 million per year on US items exported to India,” he added.

The US decision to withdraw the tariff exclusion on Indian goods was reportedly triggered by Delhi’s refusal to provide American corporations with unlimited access to India’s booming consumer market. The GSP program allows developing nations tax-free trading with the US, and, in 2017, India became the program’s biggest beneficiary.

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“India is a robust market and its economic fundamentals are sound. The withdrawal of GSP will not make much difference as Indian exports are all geared to take this challenge,” Singla said. “Even the US was benefiting from the GSP regime, since the intermediary inputs provided by India helped keep its industry competitive.”

For more stories on economy & finance visit RT's business section

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