- At the heart of the dispute was the US insistence that India should remove the price cap on knee implants and stents
- New Delhi regulates stent as “essential medicine”, but it is a money-spinner for western companies
- India declined
sayingit had commitments to make such medical devices affordable to the Indian patients
WASHINGTON/ NEW DELHI: American President Donald Trump on Monday notified the US Congress that he intends to terminate preferential trade terms to India within 60 days, apparently dissatisfied with concessions New Delhi made in response to his efforts to force open the Indian market.
India had sent formal proposals to the Trump administration agreeing to open up its agriculture, milk, and poultry markets in response to Washington’s warning that it will terminate the Generalized System of Preferences (GSP) — a program under which $5.6 billion of Indian exports to
The offer did not cut any ice with Trump, who told US lawmakers in a letter that India “has not assured the United States that it will provide equitable and reasonable access” to its markets and he
At the heart of the dispute was the US insistence that India should remove the price cap on knee implants and stents — which New Delhi now regulates as “essential medicine” but which is a money-spinner for western companies. India declined
On the US
India is the world’s largest beneficiary of the GSP with nearly 2000 of its products worth $ 5.6 billion, approximately 12 per cent of its exports to the US, eligible for zero-tariff export. The products include motor vehicle parts, jewelry, handicrafts, carpets, marine produce and a range of raw materials such as granite (Aside: the Vietnam Memorial is built from granite imported from India).
But Indian officials maintain the GSP withdrawal will not be a crushing blow; exports will continue, except they will be subject to tariffs. The reckoning is that some day in
In fact, Trump despatched a separate letter to lawmakers at the same time as the India letter withdrawing GSP facility to Turkey, with the reasoning that it had reached an economic status that no longer merited preferential concessions.
Although Trump told US lawmakers in his letter that he will “continue to assess whether the government of India is providing equitable and reasonable access to its markets,” and the withdrawal will kick in only after 60 days through a presidential proclamation, there is little chance of any deal being salvaged in the two month window.
That’s mainly because India’s election code of conduct will kick in soon and the government will be hamstrung for the next two months in offering any more concessions.
Besides, New Delhi appears to have calculated that the tariff concession loss, estimated by commerce ministry officials at between $ 200 million to $ 250 million, is not something to lose sleep over. “We just have to take it on the chin and move on,” one official who spoke on background said.
On the geo-political front through, there is some surprise that Trump has put a hex on the so-called strategic ties with India by talking up trade issues with relatively modest financial outcomes – chump change in fact.
The Harley-Davison tariff issue that he