US Removes India from List of 'Developing Nations' ahead of Trump Visit

New Delhi, February 17, 2020:

The United States has removed India, which is the largest beneficiary nation under Generalized System of Preferences (GSP), from its list of developing nations ahead of the visit of US President Donald Trump on February 24-25.

It has removed India on account of it being a G-20 member and having a share of 0.5% or more of world trade. The United States Trade Representative (USTR) has also removed Brazil, Indonesia, Hong Kong, South Africa and Argentina apart from India from its list of developing nations that are exempt from investigations into whether they harm American industry with unjust subsidized exports.

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The US has eliminated its special preferences for a list of self-declared developing countries that includes India. It may be mentioned here that the Generalized System of Preferences (GSP) is America’s oldest preferential trade scheme, which offered Indian exporters tariff-free access.

The move of removing India from the developing countries’ list is expected to stop all chances of India reclaiming its benefits under the GSP scheme.

According to the data from the United States Trade Representative's (USTR) office, India is the largest beneficiary nation under the GSP, with total benefits from tariff exemptions amounting to $260 million in 2018.

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“For purposes of US CVD law, the USTR therefore considers countries with a share of 0.5% or more of world trade to be developed countries,” the USTR said in a federal notice.

It may be mentioned here that the US in January, 2019 had proposed the withdrawal of special rights and exemptions for emerging economies such as India and China, which are members of the Organisation for Economic Cooperation and Development (OECD), G20, classified as “high income” by the World Bank or account for more than 0.5% of global merchandise trade.

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Reports said that while India wanted to restore benefits under the GSP and sought more access for its products in the US, Washington sought doing away with duty on American information and communication technology goods along with market access for its dairy products and duty cuts on Harley-Davidson motorcycles. The US is also keen to sell more almonds to India.

US President Donald Trump is scheduled to visit India on February 24-25. This trip to India is expected to strengthen the ties between the two countries.

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