Trump to end special trade treatment for India

This article is more than 12 months old

Mar 06, 2019 06:00 am

WASHINGTON/NEW DELHI US President Donald Trump looked set to open a new front in his trade wars on Monday with a plan to end preferential trade treatment for India that allows duty-free entry for up to US$5.6 billion (S$7.6 billion) worth of its exports to the US.

India played down the impact of the move, saying it was keeping retaliatory tariffs out of its talks with the US, but the opposition could seize on the issue to embarrass Prime Minister Narendra Modi ahead of a general election this year.

Mr Trump, who has vowed to cut US trade deficits, has repeatedly called out India for its high tariffs, and US trade officials said scrapping the concessions would take at least 60 days after notifications to Congress and the Indian government.

"I am taking this step because, after intensive engagement between the US and the government of India, I have determined India has not assured the US it will provide equitable and reasonable access to the markets of India," Mr Trump said in a letter to congressional leaders.

India is the world's largest beneficiary of the Generalised System of Preferences programme, which dates from the 1970s, and ending its participation would be the strongest punitive action against India since Mr Trump took office in 2017.

Farm, marine and handicraft products are among India's exports most likely to be hit by the move, Mr Ajay Sahai, the director general of the Federation of Indian Export Organisations, told Reuters. But the preferential trade treatment brings India "actual benefit" of just US$190 million a year, India's Commerce Secretary Anup Wadhawan said. - REUTERS