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US to end preferential treatment terms to India in trade, India not to retaliate

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US to end preferential treatment terms to India in trade, India not to retaliate

[vc_row][vc_column][vc_column_text]In a move seen as a major setback to India-US bilateral relations in trade and economy, US President Donald Trump on Monday, March 4, told the US Congress he intended to terminate the designation of India and Turkey as beneficiary developing countries under the Generalised System of Preferences (GSP) programme.

The program, which sets zero tariffs for certain goods from a set of 120 developing countries in order to foster trade and economic development, accounts for some $5.6 billion of India’s exports to the US, making India the largest GSP beneficiary. Exports to the US from India under GSP — at $5.58 billion — were over 12 per cent of India’s total goods exports of $45.2 billion to the US.

The GSP programme allows duty-free entry of 1,784 products from India into the US, benefitting exporters of textiles, engineering, gems and jewellery and chemical products, said a media report.

In a letter to the Speaker of the US House of Representatives, Nancy Pelosi, Trump said that New Delhi had “not assured” the United States that it would “provide equitable and reasonable access” to the markets of India.

“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…” Trump said in a letter to the Speaker of the House of Representatives and President of the Senate, shared with reporters.

A mandatory 60 days must now pass after notice has been given to the beneficiary countries and to Congress, during which time there is, technically speaking, the possibility of negotiation. After the 60-day period, a beneficiary country can be taken off the GSP list by a presidential proclamation.

While Trump said in his letter that he “will continue to assess whether the Government of India is providing equitable and reasonable access to its markets, in accordance with the GSP eligibility criteria,” a re-negotiation of India’s place under the system is, however, unlikely, The Hindu reported quoting sources.

In a separate letter, Trump also informed the Congress of his intent to terminate the GSP beneficiary designation of Turkey. This was primarily because the economy of Turkey had improved a lot in the last four-and-a-half decades and is no longer a developing country.

“In the four-and-a-half decades since Turkey’s designation as a GSP beneficiary developing country, Turkey’s economy has grown and diversified,” he said.

Trump has had several disagreements with Turkey’s leader, Recep Tayyip Erdogan. His country’s once-robust economy has weakened, and that will likely be a key issue in local elections at the end of the month, said a Bloomberg report.

In a separate statement, the US Trade Representative (USTR) said India’s termination from GSP followed its failure to provide the US with assurances that it would provide equitable and reasonable access to its markets in numerous sectors. “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 United States Trade Representative (USTR) said on its website.

“By statute, these changes may not take effect until at least 60 days after the notifications to Congress and the governments of India and Turkey, and will be enacted by a Presidential Proclamation,” the USTR said.

Under the United States GSP programme, certain products can enter the US duty-free if the beneficiary developing countries meet the eligibility criteria established by Congress. The GSP criteria include, among others, respecting arbitral awards in favour of US citizens or corporations, combating child labour, respecting internationally recognised worker rights, providing adequate and effective intellectual property protection and providing the US with equitable and reasonable market access. Countries can also be graduated from the GSP programme, depending on factors related to economic development.

Points of friction

India’s new e-commerce rules, price controls on medical devices and tariffs on ICT (information and communications technology) products are among the issues that have caused trade frictions between the two countries. Trump has repeatedly taken shots at India’s tariffs, which he views as unreasonable. US commerce secretary Wilbur Ross recently raised concerns regarding new trade barriers created by India, hinting at the stringent e-commerce rules that affected US companies such as Amazon and Walmart-owned Flipkart.

The Trump Administration had launched an eligibility review of India’s compliance with the GSP market access criterion in April 2018. The USTR announced that it was reviewing the GSP eligibility of India, after the US dairy industry and the US medical devices industry requested a review of India’s GSP benefits, given India’s alleged trade barriers affecting US exports in these sectors. Total US imports under GSP in 2017 was $21.2 billion, of which India was the biggest beneficiary with $5.6 billion, followed by Thailand ($4.2 billion) and Brazil ($2.5 billion).

“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 USTR said.

India to take it easy

The Indian government on Tuesday downplayed the effect of the decision by the United States government to withdraw trade concessions granted to India under the Generalised System of Preferences (GSP).

India’s Commerce secretary Anup Wadhawan, The Hindu reported, said that the impact would amount to $190 million on total export amount of $5.6 billion to the US.

He said disproportionate demands from the US led to the collapse of talks even though India was ready for greater market access in agricultural products to the US.

“The withdrawal of GSP benefits to India will have a minimal and moderate impact,” Wadhawan was reported to have said at a press conference. “The total GSP benefits amount to about $190 million on overall exports of $5.6 billion between the two countries.”

“We had worked out a meaningful package that covered the US’ concerns but they made additional requests which were not acceptable at this time,” he added.

Wadhawan added that India was still in talks with the US on the higher import duties that country charges on steel and aluminium, and said that India was still reviewing whether it would impose retaliatory tariffs or not. The government had in the middle of last year decided the list of items on which it would impose retaliatory tariffs, but has since then postponed the deadline of implementation six times, said The Hindu report. The latest deadline is April 1, 2019.

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India closely monitoring situation in Iran, urges nationals to leave

India has advised its citizens in Iran to leave the country as authorities closely monitor the deteriorating security situation, with nearly 9,000 Indians currently residing there.

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The Indian government on Friday said it is closely monitoring the evolving security situation in Iran and has advised Indian nationals currently in the country to leave using available means. The Ministry of External Affairs (MEA) stressed that ensuring the safety and well-being of Indian citizens remains a priority.

Speaking during the weekly media briefing in New Delhi, MEA spokesperson Randhir Jaiswal said approximately 9,000 Indians are presently residing in Iran, with students forming the majority of the community. He said the government has issued multiple advisories in response to recent developments.

“In light of the situation, we have advised Indian citizens in India not to travel to Iran at this time, and those currently residing there have been asked to leave the country by whatever means are available,” Jaiswal said.

The spokesperson added that the government is maintaining close vigilance over developments and is prepared to take necessary steps for the welfare of Indian nationals.

Embassy advisories and travel warnings

The Indian Embassy in Tehran has issued an advisory asking Indian citizens — including students, businesspersons, pilgrims and tourists — to depart Iran through available transport options, including commercial flights, citing the evolving security environment.

Separately, the MEA reiterated its advisory urging Indians to avoid travel to Iran until further notice. It also recalled an earlier warning issued on January 5, advising Indian nationals in Iran to remain cautious and refrain from participating in protests or demonstrations.

Indian citizens in Iran have been asked to keep essential travel and identification documents, including passports, readily accessible. Those living in the country on resident visas have also been advised to register with the Indian Embassy.

Protests and regional tensions

The advisories come against the backdrop of nationwide protests in Iran, which began at Tehran’s Grand Bazaar in late December following a sharp fall in the Iranian rial. The demonstrations later spread across the country amid mounting economic challenges, including inflation, unemployment, power outages and water shortages.

Regional tensions have also risen amid international warnings of possible military action if the situation escalates further. These developments have prompted several countries, including India, to review travel advisories and safety measures for their citizens in Iran.

India has maintained long-standing ties with Iran, though officials have indicated that recent international trade-related announcements linked to Tehran are expected to have a limited impact, given the relatively small share of bilateral trade in India’s overall commerce.

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Trump calls it a wonderful gesture as Machado presents him Nobel Peace Prize medal

Donald Trump described it as a “wonderful gesture” after Venezuela’s opposition leader Maria Corina Machado presented him with her Nobel Peace Prize medal during a White House meeting.

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US President Donald Trump has described it as a “wonderful gesture” after Venezuela’s opposition leader Maria Corina Machado presented him with her Nobel Peace Prize medal during a meeting at the White House.

Trump praised Machado publicly after the interaction, saying she had been through “so much” and that the act reflected “mutual respect.” He said the medal was given to him for the work he has done, according to his post on his social media platform.

The gesture, however, has drawn attention as the Nobel Institute has clarified that a Nobel Peace Prize cannot be transferred to another individual.

Nobel Institute rules out transfer of prize

The Nobel Institute has stated that Machado is not permitted to give her Nobel Peace Prize to Trump. Despite this, a White House official confirmed that Trump intends to keep the medal, even if the act remains symbolic.

Trump has long expressed interest in the Nobel Peace Prize, making the episode particularly notable despite the formal limitations placed on such honours.

Political context behind the meeting

Machado had been widely regarded as Venezuela’s democratic leader-in-waiting before Trump’s recent policy decisions regarding the country. Earlier this month, Trump declined to fully back her challenge to Venezuela’s ruling regime and instead signalled openness to engaging with leaders linked to the existing power structure.

Trump has publicly questioned Machado’s ability to lead, saying she lacks sufficient support and respect within Venezuela. Her political party is believed to have won the 2024 elections, results that were rejected by President Nicolas Maduro.

Trump has also indicated a willingness to work with acting President Delcy Rodriguez, who previously served as Maduro’s deputy.

What Machado said after the meeting

Speaking to reporters after leaving the White House and heading to Capitol Hill, Machado said she presented the medal to the US president as recognition of his “unique commitment” to Venezuela’s freedom.

She added that Trump did not provide detailed assurances during their closed-door discussion, including on the issue of elections in Venezuela. No further specifics of the meeting were disclosed.

Afterwards, Machado greeted supporters gathered near the White House gates, hugging several of them. Addressing the crowd, she said they could count on President Trump, prompting brief chants of appreciation from those present.

Machado’s recent public appearance

Before her visit to Washington, Machado had largely stayed out of public view since travelling to Norway last month, where her daughter accepted the Nobel Peace Prize on her behalf. She had spent nearly a year in hiding in Venezuela before appearing at the ceremony.

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US freezes immigrant visa processing for 75 countries, India not in list

The United States suspends immigrant visa processing for 75 countries, excluding temporary visas, as part of stricter immigration measures.

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The United States has indefinitely suspended immigrant visa processing for 75 countries, targeting individuals seeking permanent residency based on nationality. The move, set to take effect on January 21, excludes tourist and temporary work visas, but is expected to have a significant impact on family-based immigration.

Reasons behind the visa freeze

The US State Department said the suspension aims to prevent the entry of foreign nationals likely to require government welfare and public benefits. “The Trump administration is bringing an end to the abuse of America’s immigration system by those who would extract wealth from the American people,” said State Department spokesman Tommy Pigott.

While the administration cites the risk of immigrants draining government resources, studies by the Cato Institute and other research groups suggest immigrants generally use fewer benefits than US-born citizens.

Who will not be affected

Temporary visas for tourists, business travelers, and sports fans remain unaffected. Exceptions are also allowed for individuals with dual nationality, a valid passport from a country not on the list, or travel serving an “America First” national interest. Approved visas that have not yet been printed must be refused according to the State Department.

Countries affected

The visa freeze covers nations across Africa, Asia, Latin America, the Middle East, and Eastern Europe. Some of the most affected countries include Pakistan, Bangladesh, Somalia, Russia, Iran, Afghanistan, Brazil, Nigeria, and Thailand.

Other countries on the full list include Albania, Algeria, Armenia, Azerbaijan, Bahamas, Barbados, Belarus, Belize, Bhutan, Bosnia and Herzegovina, Myanmar, Cambodia, Cameroon, Cape Verde, Colombia, Côte d’Ivoire, Cuba, Democratic Republic of the Congo, Dominica, Egypt, Eritrea, Ethiopia, Fiji, The Gambia, Georgia, Ghana, Grenada, Guatemala, Guinea, Haiti, Iraq, Jamaica, Jordan, Kazakhstan, Kosovo, Kuwait, Kyrgyzstan, Laos, Lebanon, Liberia, Libya, North Macedonia, Moldova, Mongolia, Montenegro, Morocco, Nepal, Nicaragua, Republic of the Congo, Rwanda, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Senegal, Sierra Leone, South Sudan, Sudan, Syria, Tanzania, Togo, Tunisia, Uganda, Uruguay, Uzbekistan, and Yemen.

Trump administration immigration record

The Trump administration has already imposed stricter vetting procedures over the past year, revoking over 100,000 visas and deporting more than 605,000 people, with 2.5 million others leaving voluntarily. Critics highlight that the policy disproportionately affects immigrants from non-European countries.

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