Trump’s threat to India

In a notice on Monday U.S. President Donald Trump notified that he intends to end preferential trade terms for India under the U.S.’s Generalized System of Preferences (GSP) program. India’s designation under the program allows duty-free entry of about 2,000 products. The program accounts for some $5.6 billion of India’s exports to the U.S, making India the largest GSP beneficiary.US-India trade ties were hurt after India unveiled new rules on e-commerce that restrict the way Amazon.com Inc and Walmart Inc-backed Flipkart do business.Mr.Trump in his letter said that “I am taking this step because, after intensive engagement between the United States and the Government of India, I have determined that India has not assured the United States that it will provide equitable and reasonable access to the markets of India.India has implemented a wide array of trade barriers that create serious negative effects on United States commerce. Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion.” The notification starts a 60-day countdown before the president can take the action on his own authority. This if implemented could actually put India in difficult situation since it will effect almost $6 billion duty free imports to U.S. from the country. Donald Trump also added that if India assures the United States that it will provide equitable and reasonable access to the markets of India there could be re-negotiation before the final decision of country to be taken off of the GSP list by Presidential proclamation. Turkey is the second country to receive the same notification.