The move by the United States (U.S.) to terminate India’s designation as beneficiary developing country under the Generalized System of Preferences (GSP) programme because it no longer complied with the statutory eligibility criteria, is likely to affect plastic exports from India said a trade body.
“At the Plastic Export Promotion Council (Plexconcil), we conducted an analysis and found that in India’s case, the GSP concessions extended by the U.S. amounted to a duty reduction of $30 million per annum on imports of plastic products worth $600 million for the period January to December 2018,” said Ravish Kamath, chairman, Plexconcil.
He said some of the product segments which may face a decline in exports to U.S. due to withdrawal of GSP concessions include plastics raw materials, consumer and houseware items and polyester films.
Sribash Dasmohapatra, executive director, Plexconcil said, “We feel that the withdrawal of GSP benefits would negatively impact the exports of Plexconcil member-exporters to the U.S. and we have requested the Union Commerce Ministry to engage in discussions with the U.S. to allow continuation of GSP and or incentivise exporters through some other measure as they may deem appropriate.”
Trade surplus for India
In 2018, India and the U.S. reported a bilateral trade (only merchandise goods) worth $84.9 billion, up 20% from the previous year.
The trade was in favour of India, which reported a surplus of $17.9 billion during 2018, down 15.1% from $21.1 billion a year earlier.
Peeved by the fact that India and some other countries were enjoying a trade surplus with U.S. without giving an ‘equal access’ to American goods in their respective countries, the Office of the United States Trade Representative on March 4 issued a press release stating that United States would terminate India’s designation as beneficiary developing country under the GSP programme because it no longer complied with the statutory eligibility criteria.
Under the GSP programme, certain products could enter the U.S. duty-free if beneficiary developing countries met the eligibility criteria established by the Congress. According to the United States Trade Representative (USTR), the total U.S. imports under GSP in 2017 was $21.2 billion, of which India was the biggest beneficiary with $5.6 billion.