US renews GSP benefits for Indian exporters

After a prolonged wait of over a year and a half, the US on Tuesday finally extended Generalised System of Preferences (GSP) benefits for Indian exporters retrospectively from August 2013. This will enable duty-free entry of 3,500 product lines. The move is expected to benefit exporters of textiles, engineering, gems and jewellery and chemical products, among others, as their biggest market is the US.

After an 18-month prolonged wait, the US government on Tuesday finally extended the generalised system of preferences (GSP) for Indian exporters retrospectively from August 2013, enabling dutyfree entry of 3,500 product lines. The move is expected to benefit exporters of textiles, engineering, gems and jewellery, and chemical products, among others, as their biggest market is the US. The USGSP, which expired in July 2013, has been extended with retrospective effect from August 2013 till December 2017.

In the GSP a wide range of industrial and agricultural products originating in certain developing countries are given preferential access to American markets. This is given in the form of reduced or zero rates of customs duties. It was introduced by the US in 1976. During the United Progressive Alliance regime, then Commerce Minister Anand Sharma had taken up the matter strongly. This was the longest delay by the US in renewing the GSP.

The move is expected to increase the quantum of exports into the US markets. Exporters are also hopeful that with an increased demand in those markers, exporters can enjoy double benefits. “This is going to boost exports to the US markets. Demand is going up there and exporters will benefit from such a move. This has been one of our long-pending demands. We can expect merchandise exports to see a turnaround as our competitiveness will now increase,” said Ajay Sahai, chief executive officer, Federation of Indian Export Organisations.