Reacting to the US decision of withdrawing the Generalised System of Preferences (GSP) scheme for India that allowed duty free export of over 3,000 products from the country, the Commerce & Industry Ministry has said that it was “unfortunate” that the resolution offered by New Delhi on the matter was not acceptable to Washington.

“We have significant development imperatives and concerns and our people also aspire for better standards of living. This will remain the guiding factor in the government’s approach,” the Commerce Ministry stated in its response to the GSP withdrawal indicating that it was not possible for the country to ignore the interest of its people while working on trade deals.

The GSP scheme for India is to be withdrawn from June 5. “I have determined that India has not assured the US that it will provide equitable and reasonable access to its markets. Accordingly, it is appropriate to terminate India's designation as a beneficiary developing country effective June 5, 2019,” Trump said in a proclamation on Friday.

Also read:Trump terminates preferential trade status for India under GSP

The US had announced its plans to terminate India’s and Turkey’s designations as ‘beneficiary developing countries’ for the GSP scheme, which is a unilateral and non-reciprocal benefited extended by the US to a number of developing countries, in March 2019. India was the largest beneficiary of the GSP programme in 2017 with duty free status being given to $5.7 billion worth of imports into the US.

While the benefit was withdrawn for Turkey last month, Washington decided to wait till the general elections were over in India before removing the country from the list of beneficiaries. What is surprising though is that the US did not give any time to the new government to take decisions favourable to the US.

The Donald Trump regime, which has been miffed with India for running a trade surplus with the country, had made a number of demands including softening of price caps on medical equipment, removal of certain mandatory certifications for dairy product exports, removal of import duties on cellular phones and roll-back of certain changes made in the e-commerce policy that imposed several restrictions on foreign players for sourcing goods from vendors.

“India as part of our bilateral trade discussions had offered resolution on significant US requests in an effort to find a mutually acceptable way forward. It is unfortunate that this did not find acceptance by the US,” the Commerce Ministry response stated.

On a positive note, the Commerce Ministry said that India will continue to build on its strong ties with the US, both economic and people-to-people. “We are confident that the two nations will continue to work together intensively for further growing these ties in a mutually beneficial manner,” it said.

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