Indian business lobbies call for talks with U.S. over scrapped preferential export benefits
By Atul Ranjan
NEW DELHI, NNA – Indian business lobbies are calling on the government to ask Washington to reverse its decision to end preferential benefits for Indian exporters at a time when domestic growth is facing headwinds.
“With the new government in place we should resort to dialogue and try to reverse the U.S. decision of termination of benefits under Generalized System of Preferences for Indian products,” Dilip Chenoy, secretary general of the Federation of Indian Chambers of Commerce and Industry, said in a statement Monday, two days before the termination took effect on June 5.
According to Chenoy, $5.6 billion worth of products were exported from India to the United States under the GSP in 2017.
The Confederation of Indian Industry also urged the government to resolve the trade issue with the U.S. to help achieve India’s overall exports target of $400 billion in the current fiscal year ending March 2020.
India’s economic growth last fiscal year decelerated sharply to a five-year low at 6.8 percent, down from 7.2 percent in the previous 12-month period amid a domestic cash liquidity squeeze and global slowdown, official data showed last week.
Kashish Parpiani, research fellow at Observer Research Foundation, told NNA that India should stress its importance as a key trading partner to U.S. trade negotiators.
“As Washington and Beijing get stalled in a game of chicken over who will, and most crucially, can hold out longer, alternate sourcing avenues like India for U.S. companies looking to reduce dependency on China is in the U.S. interest,” Parpiani said.
Indian brokerage firm ICICI Securities Ltd. said in a research report in March that the impact of GSP curtailment is likely to be minimal as the GSP benefits represent only 12 percent of India’s total exports to the U.S. which stood at $46 billion in 2017.
“Although the impact of GSP removal on headline exports is likely to be insignificant, some sectors like agriculture, food products and low-cost manufacturing could witness a noticeable impact,” the report said.