Trump to drop preferential trade treatment for India; Delhi plays down impact

Credit: Reuters Studio
Published on March 5, 2019 - Duration: 01:36s

Trump to drop preferential trade treatment for India; Delhi plays down impact

U.S. President Donald Trump looked set to open a new front in his trade wars on Monday with a plan to end preferential trade treatment for India that allows duty-free entry for up to $5.6 billion worth of its exports to the United States.

David Pollard reports.

Trump to drop preferential trade treatment for India; Delhi plays down impact

As China's hopes rise for an end to one trade war, India's might be about to sink on the threat of its own spat with Washington.

Donald Trump is set to scrap duty-free entry for 5.6 billion dollars worth of India's exports to the U.S after repeatedly calling it out for high tariffs.

For now, India appears keen to play the decision down.

Saying on Tuesday it's keeping retaliatory tariffs out of its talks with the U.S. (SOUNDBITE) (English) INDIAN COMMERCE SECRETARY, ANUP WADHAWAN, SAYING: "The talks are always on.

The negotiation remains on at all the times.

There is no sort of disruption of discussion.

So, that discussion certainly will be ongoing." India ran an estimated goods and services trade surplus with the U.S. of over 27 billion dollars in 2017.

But says the actual benefit from the preferential trade treatment that covers nearly 4,000 products exported to the U.S. amounts to just 190 million dollars.

Farm, marine and handicraft goods are, though, among those likely to be hit.

(SOUNDBITE) (English) PRESIDENT OF FEDERATION OF INDIAN CHAMBERS OF COMMERCE AND INDUSTRY, SANDIP SOMANY, SAYING: "If it is imposed, which I am hopeful it will not be, then we will become to that extent uncompetitive, Indian products will become uncompetitive." In an election year for India, the U.S. move may well be bad news for Prime Minister Modi.

But will take at least 60 days to implement after formal U.S. notification.

By then, the world may know whether the U.S./China trade war is indeed approaching a conclusion.

And along with India, Turkey too may know whether it's to be singled out for an end to preferential U.S. treatment - as warned by U.S. trade officials on Monday.

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