Donald Trump says he will scrap trade privileges given to India 

Donald Trump.

New Delhi: The United States president, Donald Trump, sought to open a new front in his trade wars with a plan to end preferential trade treatment for India that allows duty-free entry for up to $5.6 billion worth of New Delhi’s exports to the US.

Although, India played down the impact confirming that it was keeping retaliatory tariffs out of its talks with the US but the opposition could use the issue to embarrass Prime Minister Narendra Modi ahead of general election this year.

Trump, in a letter to congressional leaders, said, “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 is the world’s largest beneficiary of the “Generalized System of Preferences” and ending its participation would be the strongest punitive action against it, now that Trump took the office. However, the US and China appear close to a deal to roll back its tariffs on at least $200 billion worth of Chinese goods, according to a Reuters report from last month.

Commerce secretary Anup Wadhawan said that India used the concession for just 1,784 products of 3,700 covered products and that the preferential treatment brought India an annual “actual benefit” of just $190 million.

According to the United States trade representative, the US ran a goods and services trade deficit of $27.3 billion with India in 2017. But, according to the trade ministry, India’s falling trade deficit estimated to have narrowed by more than $4 billion in 2018, which also can fall further on growing demand for energy and civilian aircraft.

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