The Indian industry is upset over delay in renewal of the United State’s Generalised System of Preferences (GSP) scheme which allows import of select commodities from developing countries duty free.
With the scheme lapsing on July 31, Indian goods that were enjoying duty free entry would now be subjected to regular import duties. India was the top developing country GSP-beneficiary in 2011 with $ 3.7 billion in imports entering the US duty free.
Although the US Government has assured India that they are fast-tracking the legislative process to extend the scheme, exporters say that the delay was causing uncertainties and hurting business.
“Timely renewal of GSP is very important at this juncture for maintaining stable bilateral trade between India and US and to avoid uncertainty in quoting/bidding for any new business which will adversely affect the trade of both countries. Non-renewal will further aggravate the trade deficit," said Sanjay Budhia, Chairman, CII National Committee on Exports and Imports, & Managing Director, Patton Group.
Commerce and Industry Minister Anand Sharma took up the issue of timely extension of the GSP scheme during his meeting with US Trade Representative Michael Froman recently.
The GSP program not only helps developing countries to expand their economies by increasing exports to the US, the program also aids American businesses by lowering the cost of imported goods that are used as inputs in value-added U.S. production, Budhia said.