New Delhi (Sputnik) — Days after India vowed to uphold national interests amid a rift with the the US over trade privileges, India's major trade body has claimed the government is firmly planning to counter the Trump administration's decision to withdraw the Generalised System of Preferences (GSP) on Indian goods by imposing retaliatory tariffs from the coming month.
President Donald Trump last Friday ordered the Treasury to disband the preferential trading regime with India which had granted the Asian country trade preferences under a 1975 agreement recognising India as a beneficiary developing country. The new status will come into effect from 5 June.
"India might counter the US decision to withdraw GSP on its exports by imposing retaliatory tariffs from the coming month. The Industry estimates, this move will impose an additional burden of $290 million per year on US items exported to India," Mohit Singla, chairman of the Trade Promotion Council of India (TPCI), said.
India has been extending the date to impose a retaliatory tariffs on twenty-nine items imported from the US, including walnuts, lentils, boric acid and diagnostic reagents, among others that will face higher duties.
India was the largest beneficiary of the GSP programme in 2017 with $5.7 billion in imports to the US given duty-free status. India's top exports to the US under the GSP in 2017 included motor vehicle parts, ferro alloys, precious metal jewellery, building stone, insulated cables, leather products, garment (marginal) and wires.
President Trump had repeatedly pressured New Delhi to open its markets to US trade to close the deficit, which is around $27.3 billion, and protested the country's protectionist tariff policies, including recently re-elected Prime Minister Narendra Modi's 'Make In India' project.