U.S. President Donald Trump decided to set a new front in the trade war by ending preferential trade agreement with India that allows duty free entry of $5.6 billion worth of country’s exports in United States. Although, United States trade deficits has repeatedly called out India for high tariffs. According to Trump, India has not assured the country to provide reasonable and equitable access in the markets of India. After this action, it would be considered the strongest punitive action for the South Asian Nation as India is the world’s largest beneficiary of the GSP program. According to U.S Trade Representative Office, it would take at least 60 days to remove India from GSP programe.
Trade ties between U.S and India hurts when India disclosed new rules on e-commerce that limits the way of e-com giants like Amazon, Flipcart( by Walmart). The country also forced global recognized payment companies such as Mastercard, Visa to move their data to India and imposed higher tariffs on electronic products majorly in smartphones. India has created a huge trouble in trade between both countries that created serious effects on United States commerce. Also it failed to take necessary steps to control this.
Some of the major items of GSP exports were building stone, motor vehicle parts, cables and wires, jewellery etc. The trade deficit of U.S goods and services with India was around $27 billion in 2017.