A few days ahead of Prime Minister Narendra Modi’s visit to Houston, India has got overwhelming support from a group of lawmakers in the US. A group of 44 influential lawmakers has urged President Donald Trump’s administration to put back India’s designation as a beneficiary developing country under the Generalized System of Preferences (GSP) trade programme. Even in the month of June, when Donald Trump withdrew this status from India, several members urged him not to proceed with his move as they thought of India as a strategic ally. They feared that the move would increase input costs for American producers.
The withdrawal of GSP affected benefits to the tune of $6 billion, which earlier accrued to India on exports of select items to the US. India retaliated by levying retaliatory tariffs on 28 products originating or exported from the US with effect from June 16. The GSP trade preference programme promotes economic development by allowing duty-free entry for a large number of products from designated beneficiary countries.
The US withdrew the preferential status from India citing lack of America’s access in the Indian market, as the reason. US President Donald Trump had said in his statement, “I have determined that India has not assured the United States that India will provide equitable and reasonable access to its markets. Accordingly, it is appropriate to terminate India’s designation as a beneficiary developing country effective June 5, 2019.”
Meanwhile, it is expected that the US may announce some major decisions to improve the Indo-US bilateral relations during Narendra Modi’s visit to the country. The White House has announced that Trump would join Modi at the mega Houston rally on September 22, as a special gesture by the US President to underline the special bond between the two countries. This will be the third meeting between the two leaders in three months, after the G-20 summit in Japan in June and the G-7 summit in France last month.