India and the United States are discussing a deal to allow the latter to reinstate the generalised system of preference (GSP) for India in exchange for certain market access commitments, says a Congressional Research Service (CRS) report. A deal could not be announced in September during Prime Minister Narendra Modi’s visit for the UN General Assembly, it said.
The Generalised System of Preference (GSP) is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.
“The US and India are holding negotiations to address bilateral trade frictions. They reportedly are discussing a deal for the US reinstatement of GSP for India in exchange for certain market access commitments from India,” CRS said in its recent report on India-US trade relations.
In June, the US terminated India’s designation as a beneficiary developing nation under the GSP programme. “The government-to-government Trade Policy Forum (TPF) has not met regularly in recent years amid growing trade frictions. The private sector-based CEO Forum also is an opportunity for bilateral engagement,” it said.
“Modi’s strong electoral mandate may embolden the Indian government to press ahead with its reform agenda with greater vigor. Recent slowing economic growth in India raises concerns about India’s business environment,” the report added.