FICCI Calls For India-US Dialogue To Reverse GSP Withdrawal
FICCI called for a dialogue between India and the US to find a workable solution with regard to the termination of the Generalized System of Preferences (GSP) for Indian products.
"With the new government in place we should resort to dialogue and try to reverse the US decision of termination of benefits under Generalized System of Preferences (GSP) for Indian products, applicable from June 5, 2019," said Mr Dilip Chenoy, Secretary General, FICCI.
He further said that the US decision will have a short-term impact on Indo-US trade, but this should be seen in the overall context of US actions to protect its trade interests globally. If not resolved amicably it may, however, impact the spirit of India-US relationship which has a huge growth potential. "India-US economic relationship needs to be seen by both the countries from a larger canvas and a long-term strategic cooperation in the areas of defence, energy and geo-strategic opportunities like the Indo Pacific," said Mr Chenoy.
"Both countries are witnessing a robust trade and the relationship is expanding to strategic sectors like oil and gas, defence and aviation. India has displayed lot of goodwill by not retaliating on steel and aluminium tariffs by the US. We seek similar understanding from the US on such issues," said Mr Chenoy.
He further added that in 2017, $5.6 billion worth of products were exported by India to the US under the GSP. The goods exported under this scheme were primarily intermediaries and played an important complementary role for US manufacturers. "The withdrawal of GSP benefits would hurt these US manufacturers by adversely impacting their cost advantage," added Mr Chenoy.
The trade deficit is also coming down with India's growing strategic engagement with the US particularly in the oil and gas, defence and aviation sector. "Such measures may not significantly impact the trade but will certainly impact the spirit of the trading community," he added.
The requirement imposed by India on the dairy and milk products, that the products be derived from animals which have never consumed any feeds containing internal organs, blood meal, or tissues of ruminant origin are in line with the sentiments of the society at large. India imports dairy products from many countries, including from EU countries which are able to satisfy India's certification requirements.
The other issue on price control on medical devices is not to restrict imports but in order to make essential medical devices affordable to a large section of the population. Indians spend only 6% of their income on health and education, and income levels are low due to which price control of medicines and medical devices are extremely important.
The schemes launched by the current government 'Ayushman Bharat' offers health security to a large population and thus offers a bigger market to the American companies to sustain profitable operations. From this perspective, the measure announced by the US government to terminate GSP for India seems uncalled for.