Lok Sabha Question No. 3720 (UNSTARRED), answered on 2019-12-11
Subject: US GSP Programme
Ministry: COMMERCE AND INDUSTRY
Asked by: Jagdambika Pal, Dushyant Singh

## MINISTRY OF COMMERCE & INDUSTRY

## GOVERNMENT OF INDIA (DEPARTMENT OF COMMERCE)

## LOK SABHA UNSTARRED QUESTION NO. 3720

## TO BE ANSWERED ON 11 th DECEMBER, 2019

## US GSP PROGRAMME

## 3720. SHRI JAGDAMBIKA PAL:

SHRI DUSHYANT SINGH:

Will the Minister of COMMERCE & INDUSTRY ( वािण�य एवं उ�ोग मं�ी ) be pleased to state:

- (a) whether the Government has failed to comply with the eligibility criteria for the Preferential Trade Status (PTS) under the Generated System of Preferences (GSP) programme of the US Government and if so, the details thereof;
- (b) whether the Government has failed to convince the US Government on India's compliance with the eligibility criteria for the PTS, if so, the details thereof and if not, the reasons therefor;
- (c) the details of the grounds cited by the US Government for the termination of special trade status;
- (d) whether the Government was aware of the eligibility review launched by the US Government in April, 2018;
- (e) if  so,  the  details  of  the  steps  taken  by  the  Government  to  con vince  the  US  Government  on  the measures taken by India to fulfill the criteria since April, 2018;
- (f) whether this will impact the volume of exports to the US and if so, the details thereof along with the potential job loss and other economic effects caused due to the cancellation of PTS; and
- (g) the details of the steps taken/to be taken by the Government to counter those effects?

## ANSWER

## okf.kT; ,oa m|ksx ea=h ( Jh ih;w'k xks;y ) THE MINISTER OF  COMMERCE AND INDUSTRY

## (SHRI PIYUSH GOYAL)

- (a) to (e) The Generalised System of Preferences (GSP) is a unilateral scheme given by  developed  countries  like  the  United  States  under  the  legal  decision  of 28.11.1979  named  as  ' Differential  and  More  Favourable  Treatment  Reciprocity and  Fuller  Participation  of  Developing  Countries '  also  known  as  the  ' Enabling

Clause '  agreed  upon  by  the  GATT  Contracting  Parties  and  subsequently incorporated into the WTO legal system. Under the United States GSP program, certain products can enter the United States  duty-free  if  beneficiary  developing  countries  meet  the  eligibility  criteria established by their Congress. GSP criteria include, among others, respecting arbitral awards in favour of United States citizens or corporations, combating child  labour,  respecting  internationally  recognized  worker  rights,  providing adequate and effective intellectual property protection, and providing the United States  with  equitable  and  reasonable  market  access. Countries  can  also  be graduated from the GSP program depending on factors related to their economic development. The United States launched an eligibility review of India's compliance with the GSP market access criterion in April 2018. The petitions filed by the U.S. dairy industry and the U.S. medical devices industry were also included in this review, which  alleged that Indian trade barriers affected U.S. exports in these sectors. India had submitted Pre-Hearing Briefs, attended the Public Hearing and also submitted Post-Hearing Briefs, to USTR (U.S. Trade Representative) in June, 2018. During  the  process  of  GSP  review,  USTR  added  various  demands  including greater market access for a number of its products and used the non-reciprocal GSP benefit as a lever to extract further concessions from India. Though India took its best efforts to arrive at a mutually beneficial trade package, the US review culminated in issuance of withdrawal notice by the US on 4th March, 2019 and GSP benefits was withdrawn with effect from 5 th June 2019. The US indicated that it withdrew the GSP for India under Section 502 of its Trade  Act  of  1974  citing  that India  did  not  provide  equitable  and  reasonable access to its markets in numerous sectors. (f) and (g) In 2018, India exported goods worth of $ 6.3 billion (as per USTR figures) to U.S. under the GSP programme, which was approx 12.1% of India's total export to U.S. The average duty concessions accruing on account of GSP were approx. $ 240 million in 2018, which was about 3.8% of India's exports to the U.S. availing the GSP benefits. The impact varies across products, depending on the individual product level concessions which were availed under the GSP. However,  so  far  the  cumulative  exports  under  the  GSP  tariff  lines  have  not declined in the post GSP withdrawal period (June - Oct 2019) as compared to the corresponding period of the previous year. Bilateral  trade  discussions  are  a  part  of  any  economic  engagement  and  such issues  also  form  a  part  of  the  discussions  in  India's  ongoing  economic engagement with the US.

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