USA's move to end GSP for India shall not deter India to compromise with its core position

Recently, United States of America ended the Generalized System of Preferences (GSP) for India. Under GSP, India used to enjoy zero import duty on certain goods that it exported to US. This meant that those goods under GSP would be cheaper in US market and therefore benefited them to be preferable against local US goods. USA took this step 'citing' India's harsh trade barriers and failure to comply with trade regulations as demanded by America. However, before jumping on to whether these claims are right, we must understand India's stand.

Among many demands made by America, major one is regarding their dairy products to be allowed in Indian Markets. India has certain serious reservations against these demand. India demanded that it can allow dairy products only from those animals which have never consumed internal organs, blood meal or things like that. It is because these things are against India's religious and cultural sentiments. Consuming a milk of cattle who is consuming meat-like-products violates Indian religious beliefs. There are also certain medical issues attached with consumption of dairy products from such animals. However, USA is not ready to compromise or agree upon any such demands. It clearly shows who is rigid and adamant when it comes to compromises. Moreover, India has already opened its market for American Cheese.

 Now looking at what impact will ending of GSP have on India, lets look at figures. Officials from Indian Ministry of External Affairs have claimed that it will not much effect because out of 3700 items that were covered under GSP, India was using concession for only 1784 of that. Indian exporters have also said that this move will not have any large negative impact. It will only impact processed food, leather, plastic and engineering goods.

Before we regret for end of GSP we shall worry for what are the opportunity costs of that. Opening up of entire dairy products market for US products will have tremendous impact on our already suffering farmers. Indian dairy industry is primarily run by cooperatives which is a source of livelihood for millions of rural people. It has also been our traditional source of earning where cattle rearing serves not only farming purpose but also yields economic benefits through sales of milk.

Recent steps of USA including this one has been highly criticized by international scholars as short-cited measures which will have negative impact on US itself in long run. While keeping our diplomatic position adamant, India must not give up to this pressure tactics and shall not compromise with our core socio-economic interests. For this, it is very important that the common people understand this issues and help in creating a positive narrative alive for the government to act likewise.       

        Jatan Bhanvadiya