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India’s trade surplus with US was minor compared to China, Japan and Mexico. But Trump slapped steel, aluminium tariffs & withdrew GSP benefits.
The ‘limited’ trade package was given final shape when Commerce Minister Piyush Goyal met US Trade Representative Robert Lighthizer in New York Monday.
Easing of trade tensions will help India boost exports and cushion an economic slowdown caused by a collapse in domestic consumption.
Data shows that loss of India's designation as a beneficiary developing nation under the GSP cost American companies about USD 30 million in July.
India watchers not optimistic that new offer, of better market access to US agriculture and dairy products, will cut much ice with Trump administration.
The Trump administration decided to hold off on the announcement until after India’s elections to avoid hurting Modi politically.
The Donald Trump administration removed India's designation on the grounds that it had not assured US of providing "equitable and reasonable access" to its markets.
US has agreed to extend GSP benefits ‘long enough for India to revert after elections’, a move that comes after some ‘adroit diplomacy’ by New Delhi.
Delegation will attempt to convince the US to extend its GSP programme, through which Delhi gets over $5 billion in zero or reduced tariffs.
Since general American tariffs are fairly low now, India can afford to ignore the threat to its $5.6 billion of US exports.
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