As the US announced the withdrawal of preferential trade status enjoyed by India in relation to duty free exports from India to the US, it continues to push India for measures to correct the US trade deficit, pegged at US$27 billion in trade relating to goods and services.
India presently enjoys certain duty free imports under a programme called the Generalized System of Preference of the US, a programme meant for supporting the economic development of eligible developing countries. 2017 figures peg the volume of imports from Indian into the US at US$5.6 billion, approximately 12% of all imports under the Generalized System of Preference programme.
The programme further requires developing countries benefiting from this duty free import regime to comply with certain market access requirements. The US feels that India has failed to meet these market access requirements, and hence intends to pull the plug on duty free imports from India under the Generalized System of Preference programme.
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Manoj Kumar is the founder and managing partner at Hammurabi & Solomon.
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