US President Donald Trump on Friday announced his decision to revoke the United States preferential trade status for India citing that India has not assured the US that it will provide ‘equitable and reasonable access to its markets’. According to a proclamation from the White House, the trade preference programme with India will end on 5th of June, 2019.

For long, India had been the largest beneficiary of a scheme that allows some goods to enter the US soil duty-free. This marks the end of India’s status as a designated beneficiary developing country under the
Generalized System of Preferences (GSP) trade programme. Under this programme, developing countries are allowed to export goods to the United States without paying duties.

As per a study by the FIEO, India’s global merchandise exports for 2018 were $324.7 billion, of which $51.4 billion were to the US. However, only $6.35 billion of exports from India to the US benefited from the GSP scheme.

Trump said in an official release, ” I have determined that India has not assured the United States that India will provide equitable and reasonable access to its markets.”

Trump’s latest move is to supposedly redress what it considers to be unfair trading relationships with other countries. According to a senior official from Trump’s administration, the benefits of the preferential trade programme could be restored if India gave US companies fair and equitable access to its markets. India, however, has said the move would have a ‘minimal economic impact’.