India unlikely to accede to US trade policy

The Office of the US Trade Representative is reviewing India's status as a beneficiary of the Generalized System of Preferences, a US trade program aimed at promoting the economic growth of developing countries by providing duty-free entry for up to 4,800 products from 129 designated countries and regions, and considering cancelling the zero-tariff arrangement for $5.6 billion of Indian imports, according to Reuters. Among the developing countries, India has benefitted the most from the US program with about 3,500 Indian products getting zero-or low-tariff entry into the US market.

If the United States does cancel the zero-tariff arrangement, India will suffer the most severe punishment imposed by the US administration. Given the US' trade policies over the past two years, the trade differences between Washington and New Delhi will further widen.

Although both countries are yet to officially respond to the Reuters report, it is obvious that their trade relations are strained despite their seeming political closeness.