India said US withdrawing the preferential status would have limited impact.
Highlights
- India currently enjoys duty-free entry for upto $5.6 billion of exports
- "Actual benefit" from the preferential trade treatment is $190 million
- The US services a majority of the Indian medical devices market
Hours after US President Donald Trump announced his decision to end preferential trade treatment for India, the government today said that the move will not have a "significant impact". India currently enjoys duty-free entry for upto $5.6 billion worth of its exports to the US, under what is known as the Generalised System of Preferences or GSP.
"India felt it had arrived at a fairly meaningful offer balancing US aspirations with our concerns, which was not workable with the US side. This is a given situation now. So it seems like we're looking at a non-GSP trade with the US," said Commerce Secretary Anup Wadhawan.
"Our assessment is there won't be significant impact on exports and, no significant edge to competitors," he said, adding that the tariffs that India imposes are "very consistent with World Trade Organization-bound rates."
The "actual benefit," which will be impacted from the US' decision will only be to the tune of $190 million, moderate vis-a-vis to the total volume of trade, the commerce secretary said in a media briefing.
The products most likely to be impacted by GSP benefits will include raw materials and intermediary goods across various sectors, including organic chemicals, he said.
India capped pricing of medical devices such as stents and knee caps last year, reducing the price of these devices by over 60 per cent. The United States services a majority of the Indian medical devices market. Recently, domestic medical equipment makers have started to report higher sales after the government's price capping.
India, Donald Trump had said a few days ago, was "a high-tariff country."
"We don't agree that India is a high-tariff country," Mr Wadhawan said, countering the charge.
The benefit to industry is low, U.S. tariffs are already low. GSP is more symbolic of the strategic relationship, not in value terms," another government official, requesting anonymity, told news agency Reuters.
The commerce secretary said the US had "extra demands" which could not be catered to, adding that talks with the US did not end favourably.
"In April 2018, the US initiated a review of our GSP benefits, mainly on two industries.. medical devices and dairy. But then the US authorities added other issues such as market access, relaxation of various procedural requirements, testing requirements etc. So it became a fairly broad-based review covering a large number of trade issues." the ministry said.
However, "trade talks with US will continue, everything is on the table," Mr Wadhawan added.
(With Inputs From Reuters)