Port Wings News Network:
Reacting to the news of US withdrawal of GSP benefits to India from 5th June, 2019, Mr Ganesh Kumar Gupta, President, FIEO said that India’s exports to the US during 2018 were USD 51.4 billion. But out of USD 6.35 billion value of exports from India to US under the GSP scheme, net benefit to the tune of only USD 260 million were accrued by the Indian exporters and thus at macro level the impact of GSP withdrawal on our exports to US would be minimal. However, in respect of products having GSP benefits of 3% or more, exporters may find it difficult to absorb the GSP loss.
Most affected sectors would be: (I) Imitation jewellery (average GSP benefit 6.9%), (II) Leather Articles (other than footwear) (average GSP benefit 6.1%), (III) Pharmaceuticals & Surgical (average GSP benefit 5.9%), (IV) Chemical & Plastics (average GSP benefit 4.8%) and (V) Agriculture: Basic & Processed (average GSP benefit 4.8%) said FIEO President.
Mr Gupta said that GSP withdrawal would also affect US manufacturers, who benefitted from it on imports of parts and components, as well as US consumers.
It will also indirectly benefit China. In the first two months of 2019, GSP imports from India are up significantly for products on the Section 301 lists, but down for products where China does not face new tariffs. For India, 97 per cent of increased 2019 GSP imports are on the China Section 301 lists. GSP imports on Section 301 lists increased by 18 %, while imports of everything else increased by just 2%. This makes a very strong case for extension of GSP benefits for India, observed FIEO Chief.
Mr Gupta said that Government should provide some supports to products where GSP loss has been significant so that the market is not lost. He favoured extension of Rebate of State & Central Tax Levies Scheme (RoSCTL) on such products on exports to US.