US allows duty-free access to 42 Indian products

Our Economic Bureau

New Delhi, Aug 8: In a major initiative, the United States has decided to restore the benefit of the US generalised system of preferences (GSP) for 42 more Indian export items in the jewellery, carpet and leather sectors. This would result in a profit of about $540 million for India.

Commerce and industry minister Murasoli Maran with US trade representative Robert Zoellick at Nirman Bhawan in New Delhi on Wednesday.

The decision was conveyed by the visiting US trade representative Robert B Zoellick during his talks with commerce and industry minister Murasoli Maran here on Wednesday.

Mr Maran welcomed the move and hoped that this would further contribute to promotion of closer bilateral trade relations, an official released said.

“We hope that the additional coverage for jewellery leather and carpets under the GSP provisions would be able to take effect by the end of the month,” Mr Zoellick told reporters after the meeting. No decision, however, to include agro-chemicals and pharmaceuticals in the enhanced list had been taken yet, he clarified.

Mr Zoellick, who had an hour-long meeting with Mr Maran, said, the decision would be notified in the federal register soon after his return to Washington next week.

He said that the US decision “gives us a tangible aspect of trying to improve important trading relationship. The US is already India’s biggest trading partner and would like to add more to this”. Two-way trade has shot up from $15 billion at the time of Uruguay Round to $39 billion at present.

The GSP is a trade programme of the US government that grants duty-free treatment to specified products that are imported from over 140 developing countries.

The US had been denying GSP for over 100 Indian products, including agricultural, chemicals and pharmaceuticals. India, on the other hand, had been pressing for restoration of these benefits.

Washington’s move implies that it is willing to address New Delhi’s concern on trade-related issues such as the GSP.

Yet another major initiative announced by Mr Zoellick related to operationalising the Indo-US trade policy dialogue at the ministerial-level and to work out the details about its framework by officials of the two governments.

He said the two sides talked about trade relations — both bilaterally and globally and in the context of the WTO. In the context of the fourth WTO ministerial conference in Doha, Mr Maran reiterated that India viewed implementation issues as a matter of great priority and emphasised that the issues arising from implementation of Uruguay Round agreements raised by developing countries needed to be urgently addressed.

He drew attention to the fact that while the WTO General Council in May last year had taken a decision to resolve these issues before the next ministerial meeting, very little progress had been achieved so far.

He called for greater political will to be shown by developed countries and said that the early resolution of these concerns would contribute substantially towards restoring confidence of the developing countries in WTO.

Mr Zoellick said during the meeting, New Delhi underscored the importance of implementation agenda. “We talked about that as well as the prospects for Doha,” he added.

Appreciating India’s stand, he felt that New Delhi would have to take its own decisions regarding Doha, adding the purpose of his visit was “more to listen and to learn and to be able to understand some of India’s concerns, so that we can bring India and the other 141 countries on board. This visit is a step in that process”.

The US trade representative said, “India has much more that it can offer the world as the world’s largest democracy. The economic reforms process is producing benefits and part of that will be India’s engagement in the international trading system including the WTO process.”

He said the subject of anti-dumping duty on cut-to-length Indian carbon steel plates did not figure during the talks. India would play a contributory role in the WTO by voicing the concern of developing countries, he stated.

Mr Zoellick would hold discussions with finance minister Yashwant Sinha and external affairs minister Jaswant Singh on Thursday. He would also meet Congress president and leader of the Opposition in the Lok Sabha Sonia Gandhi.