What is the significance of GSP to the Indo-US trade ties?
GSP stands for the General System of Preferences-the oldest and the biggest programme for US trade preference under which the US had aimed at stimulating economic development in around1 120 countries by waiving off the duties. It was established in 1974 and seeks to promote sustainable development in all the countries to which it is applicable by way of increase and diversification of their trade with the US. GSP was helpful to the US as it helped enhance the competitiveness of the US goods by a reduction in costs of imported inputs and also led to job creation in the US.
The removal of the GSP for India may not hit the entire export industry of India but will certainly pinch specific sectors like gems and jewellery, leather and processed foods, etc. Indian interests have caught in the cross-hairs in the periodic review of the US under which India failed to meet the criteria which require that the beneficiary nation should give the US equitable and reasonable access to its market.