Indian exporters may once more get to enjoy the benefits of the Generalised System of Preference (GSP) with the US Senate passing a bill to renew the trade programme. The GSP,which had expired in 2010,provides preferential duty-free entry to goods from developing countries,including India. The programme,instituted on January 1,1976,expired on December 31,2010 and ever since,Indian exporters have been losing out to other countries,which have free trade agreements with the US. The bill,although yet to receive US president Obamas assent,is a major step forward indicating that the issue is finally out of the deep freezer. Indian exporters enjoy the benefit of the scheme in five sectors carpets,handicrafts,gems and jewellery,and certain engineering products. At present,the US provides GSP for up to 4,800 products from 129 designated beneficiary countries and territories. While the GSP is designed to promote economic growth in the developing world,it is not only Indian exporters who benefit from the programme. US importers relying on the duty-exemption,also stand to gain massively from the scheme. The total US imports under GSP in 2010 stands at $22.5 billion. The US saved import duties worth $682 million in the same year. After Thailand and Angola,India is the third largest beneficiary developing country under the GSP with total export worth $3.5 billion reaping benefits of the scheme in 2010. We were hoping this to happen. This will definitely benefit our exporters. They were losing competitive edge over other countries, Ajay Sahay,DG,FEIO (Federation of Indian Export Organisations),said. Commerce and industry minister Anand Sharma had earlier said on many forums that the scheme should be revived by the US Congress with full and long-term re-authorisation. Considerable amount of our exports go through GSP. And therefore it is very important for Indian exporters. The benefit competitors having FTAs with the US get is neutralised,to some extent,by the benefits under the GSP. Hence it is very important for exporters, Abhijit Das,head and professor,centre for WTO studies,IIFT,said. He added that in the absence of GSP,Indian exporters will have to bear MFN (Most Favored Nation) duties,which are too high,ranging between 15-20 per cent in the products which get GSP benefits. Though not much in absolute term,it makes exporters uncompetitive in the US market,where they are competing with countries having free trade agreements with the US. Some of the goods which benefit from the scheme include hand-hooked carpets and other textile floor coverings of wool or fine animal hair; copper table,kitchen or other household articles and parts coated or plated with precious metals; non-electrical incandescent lamps designed to be operated by propane or other gas,or by compressed air and kerosene or gasoline; copper-zinc alloy table,kitchen or other household articles and non-electrical lamps and lighting fixtures,not of brass.
