US President Donald Trump looked set to open a new front in his trade wars on Tuesday, March 5th, with a plan to end preferential trade treatment for India that allows duty-free entry for up to $5.6 billion worth of its exports to the United States.
India played down the impact, saying it was keeping retaliatory tariffs out of its talks with the United States. However, the opposition could seize on the issue to embarrass Prime Minister, Narendra Modi, ahead of general elections this year, Reuters reports.
Trump, who has vowed to cut US trade deficits, has repeatedly called out India for its high tariffs, and US trade officials said scrapping the concessions would take at least 60 days after notifications to Congress and the Indian government.
India is the world's largest beneficiary of the Generalised System of Preferences (GSP), which dates from the 1970s, and ending its participation would be the strongest punitive action against it since Trump took office.
India's Commerce Minister, Anup Wadhawan, said leaving the GSP would not have a major impact on the economy as it only accounts for 190 million dollars of their total trade of 5.6 billion dollars