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India May Not Approach WTO Over US Withdrawing GSP Benefits

The trade analyst on Wednesday said that India will not drag US to World Trade Organization (WTO) against the move of withdrawing GSP benefits of US to end the tax benefits on the export goods of India. However, India has mentioned that it will raise the issue because India believes that the action was a biased one.

Reports of Economic Times mentions that, within the Generalized System of Preferences (GSP), the concessions should be non-discriminatory and also equal. The Indian government is most unlikely to challenge against the move of US in WTO because Washington has removed India from the GSP benefits citing the reason as India is not offering fair and well-balanced access to its markets in various sectors.

United States has not confirmed about ending the GSP benefits due to non-reciprocity. The US has spoken about fair and proper access to the Indian market, an official who knew about the details mentioned.

Although on Monday, the US President Donald Trump had revealed the decision of removing India from enjoying the benefits of the Generalized System of Preference Program regarding the Indian exported goods to Washington. The decision has been taken because Trump believed that India does not fulfill the eligibility criteria of GSP.

On Tuesday, Washington had mentioned that India had executed various trade barriers which have negatively impacted the United States’ commerce. In spite of US vigorous involvement, India has been incapable of taking the most needed measures to meet the standard of GSP.

President Trump further said that he will continue to review and see whether the Indian Government is offering fair and reasonable access to its market as per the eligibility criteria of GSP.

The European Union’s GSP rule was opposed by India back in 2002, after which the WTO Appellate Body had discovered that the GSP drug rule of European Union was not based on the criteria of goals and evidence to select the beneficiary countries. The official said that India has debated that the European Unions had distinguished from other developing countries, as of now this is not the case.

While another official member said that the final decision to challenge the removal of GSP benefit is not yet been taken, the discussions are going on.

The move of the US to withdraw India from GSP benefit must be questioned on systemic grounds, experts and former trade envoys suggest. It looks like India is surrendering the right to fight for unique and differential treatment at the World Trade Organization.

Jawaharlal Nehru University Professor, Biswajit Dhar at the centre for Economic Studies and Planning in the School of Sciences said that Generalized System of Preferences (GSP) should be totally non-discriminatory.

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