US May Withdraw Its “Zero Tariff” Policy Over Indian Exports

With US government planning to withdraw its Zero tariffs policy, India may loose a massive concession of $5.6 billion

which it has been receiving from long time due to the widening dispute between the Trump led US government and Indian government over tariffs.

According to various media reports the Trump administration is thinking over removing  Generalized System of Preferences (GSP) from India. If implemented, the said shift in policy can adversely impact India’s exports as India is the largest beneficiary of this zero tariff policy. The move is considered strongest move against India since Donald Trump came to power.

As per the experts, the recent move by the Narendra Modi government has induced the US government to take this decision. BJP government recently in a move to entice the small traders and offline merchants, issued new guidelines to reduce the market clout of FDI dependent and foreign backed E-commerce biggies like Amazon and Flipkart.

If such severe policy is now implemented by the US government then India and its export market is going to face serious repercussion in terms of huge money loss.

India Statment

Interestingly, both Narendra Modi and Donald Trump came to power with the promise to boost their respective market and bring more jobs for their people. With Narendra Modi giving the Slogan of “Make in India“- a policy which heavily relies on foreign investment while Trump talked about his Idea of “Making America Great Again” during election campaign. Now this conflict of interest is resulting in to a conflict in the Bilateral ties between India and United States.

New Indian rules announced in December for the e-commerce sector banned companies such as Amazon and Flipkart from striking exclusive deals with sellers, restricted their ability to offer discounts and barred them from selling products via vendors in which they have an equity interest.

The move disrupted product listings on Amazon’s India website and forced it to change its business structures. Amazon and Walmart, as well as the U.S. government, had lobbied against the move, Reuters reported earlier.

The new rules, coming ahead of a general election, were seen as a bid by Modi to placate small traders, who had for years complained about business practices of large e-commerce players. They form a key voter base for Modi who is facing a tightening election in the next few months.

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