U.S. Revokes Duty-Free Privileges On Import Of At Least 50 Indian Items

The U.S. on Thursday revoked duty-free concessions on import of at least 50 Indian products, mostly from handloom and agriculture sectors, reflecting the Trump administration's tough stand on trade-related issues.

The federal register issued a notification, listing out 90 products which were so far subject to duty-free provisions under the Generalized System of Preferences. Donald Trump issued a presidential proclamation on Tuesday, leading to the removal of these products from the privilege beginning Nov. 1, 2018.

These products “will no longer qualify for duty-free preferences under the GSP programme but may continue to be imported subject to regular Most Favored Nation duty-rates”, an official of U.S. Trade Representative told PTI. A review of the products indicates that the presidential proclamation is not country specific, but product specific.

With India being the largest beneficiary of the GSP, it has been hit the most by the latest decision of the Trump administration.

The GSP—the largest and oldest U.S. trade preference programme—is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.

A count of these products indicated that at least 50 of them are from India. In 2017, India's duty-free export to the U.S. under GSP was more than $5.6 billion.

The volume of India's export to the U.S. impacted by the latest move of the Trump administration isn't known yet. But the list of products from which duty-free import provision has been removed reflects that a large number of small- and medium-size businesses could be impacted.

In his presidential proclamation, Trump had said that certain "de minimis" waivers will no longer be granted for any product, regardless of the country source, that exceeds the GSP's competitive need limitation threshold. “I hereby terminate the duty-free treatment for such articles from such beneficiary developing countries.”

Products from other countries like Argentina, Brazil, Thailand, Suriname, Pakistan, Turkey, Philippines, Ecuador and Indonesia have also been removed from the GSP list.

Some of the prominent Indian products removed from the duty-free provisions of the GSP include dried pigeon pea seed, areca nuts, turpentine gum, mangoes, sandstone, tin chlorides, barium chlorides, salts and esters of tartaric acid, nesoi and trimethyl phosphite.

Full-grain unsplit or grain split buffalo hide or skin, grain split whole buffalo leather, without hair on, whole buffalo skin leather (not full grain unsplits/grain splits) and full grain unsplit buffalo leather (not whole), have also been removed from the duty-free list.

Dyed and plain weave certified hand-loomed fabrics of cotton, containing 85 percent or more cotton by weight; plain weave certified hand-loomed fabrics of cotton, containing 85 percent or more cotton by weight, hand-loomed carpet and other textile floor coverings, not of pile construction, woven, made up of man-made textile materials have also been removed.

Base metal clad with gold mixed link necklaces and neck chains and keyboard musical instruments, like harmoniums and similar keyboard instruments with free metal reeds are among the other products out of the list.

These products can still be exported to the U.S. from India but they will be subject to regular tariffs.

In April, the U.S. announced eligibility review of India for the GSP. According to the USTR, the total U.S. imports under GSP in 2017 was $21.2 billion, of which India was the biggest beneficiary with $5.6 billion. The programme has now been renewed through Dec. 31, 2020.