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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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US-Iran tensions escalate as Tehran claims drone fleet destroyed in Bahrain

Iran claimed it destroyed a US military drone fleet in Bahrain after fresh American strikes targeted multiple sites across the country, further escalating tensions in the Gulf region.

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The military confrontation between the United States and Iran intensified on Sunday as both countries exchanged fresh attacks across the Gulf region. Iran claimed it destroyed a US military drone fleet in Bahrain after Washington launched another round of strikes targeting multiple military sites inside the country.

The latest escalation comes amid growing tensions over the strategically important Strait of Hormuz, a key global shipping route for oil and natural gas exports.

US says fresh strikes targeted Iran’s military capabilities

The US Central Command (CENTCOM) said it carried out precision strikes on dozens of targets across Iran to weaken Tehran’s ability to threaten international shipping passing through the Strait of Hormuz.

According to the US military, the targets included Iranian air defence systems, coastal radar installations, missile and drone infrastructure, and small military boats. CENTCOM also said it deployed fighter aircraft, naval vessels, one-way attack aerial drones and one-way attack sea drones during the operation.

US officials said the latest offensive followed an alleged attack by Iran’s Islamic Revolutionary Guard Corps (IRGC) on a commercial vessel transiting the Strait of Hormuz. Washington has maintained that the strikes were intended to protect maritime security in the region.

US President Donald Trump also defended the operation, saying the American military had carried out extensive strikes against Iranian targets.

Iran claims attacks on US military bases

Iran responded by announcing strikes on several American military installations across the Gulf. Iranian state media reported that US bases in Bahrain, Kuwait, Qatar, Jordan and Oman came under attack as Tehran expanded its military response.

Iran’s IRNA news agency claimed that drone operations were continuing against American positions and alleged that an entire US military drone fleet stationed in Bahrain had been destroyed. However, the United States has not confirmed this claim.

In a statement, the IRGC said its aerospace forces targeted helicopter maintenance facilities, a hangar housing a P-8 surveillance aircraft and a US military drone command-and-control centre. Iranian media also reported attacks on defence systems, bunkers and support shelters at US facilities in Kuwait, including the Ali Al Salem and Ahmad Al-Jaber air bases.

Casualties reported in Iran

Iranian authorities said at least one person was killed and four others were injured after a projectile struck an agricultural water pumping station in Mahshahr in Khuzestan province.

According to local officials, the person killed was a security guard stationed at the facility. Iranian authorities said the attack occurred during the early hours of Sunday.

Explosions reported across multiple provinces

Iranian media reported explosions in several provinces following the latest US strikes.

In Hormozgan province, blasts were reported in Jask, Sirik, Qeshm Island and Bandar Abbas, where several radar installations and military facilities are located.

Explosions were also reported in Omidiyeh, Mahshahr, Behbahan, Dezful and areas near Ahvaz in Khuzestan province. Additional strikes were reported near Chabahar in Sistan-Baluchestan province and around Khondab in Markazi province, where Iran’s heavy water facilities are situated.

Diplomatic efforts face setback

Tehran said the latest US attacks had rendered months of diplomatic efforts ineffective, signalling a further deterioration in relations between the two countries.

The latest exchange of strikes has heightened concerns over regional stability and the security of maritime traffic through the Strait of Hormuz, one of the world’s most important energy corridors.

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Bangkok bar fire kills 27, leaves 22 in critical condition as probe begins

At least 27 people were killed and 63 injured after a devastating fire swept through a Bangkok bar late Sunday. Authorities are investigating the cause of the deadly incident.

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A massive fire at a bar in Thailand’s capital Bangkok late Sunday night killed at least 27 people and left dozens injured, officials said. Rescue teams and firefighters rushed to the scene after flames rapidly engulfed the venue, while people desperately tried to escape through thick smoke.

The fire broke out at the Na Ladprao pub in northern Bangkok around midnight. Firefighters managed to bring the blaze under control after battling it for nearly 30 minutes.

Smoke believed to have caused most deaths

Bangkok Governor Chadchart Sittipunt said the fire spread rapidly throughout the premises, reaching the ceiling within a short time.

According to the governor, smoke inhalation is believed to have been the primary cause of most fatalities. He confirmed that 27 people died in the incident, while 63 others were admitted to hospitals. Of those injured, 22 remain in critical condition.

Authorities have launched an investigation to determine how the fire started.

Probe underway into possible blocked escape route

Officials said several victims were discovered near a fire exit, raising concerns that the escape route may have been obstructed during the emergency.

Authorities are also working to establish how many people were inside the venue when the fire broke out, as the exact occupancy remains unknown.

Thailand Prime Minister Anutin Charnvirakul visited the site and said investigators have not yet determined the exact cause of the blaze.

Musician reported smoke before explosion

The prime minister said a musician performing at the pub told him that smoke was seen coming from a circuit breaker near the stage shortly before the electricity went out.

According to the account, an explosion was heard moments later, after which thick smoke quickly spread across the venue.

Officials also said many victims were found inside restrooms located at the rear of the pub.

Videos capture panic as flames engulf venue

Videos shared online by first responders showed flames consuming the entrance of the bar as thick black smoke billowed into the night sky. People were seen rushing out in an attempt to escape the rapidly spreading fire.

Photographs taken after firefighters extinguished the blaze revealed severe damage inside the venue, with charred interiors and burnt furniture.

Singer Sukanya Wongwongwai, who was performing nearby, said she rushed to the pub after learning about the fire because several members of her band were performing there.

She said one band member died in the blaze, three others were hospitalised and another person remains missing.

According to accounts shared by survivors, the venue went dark when the fire started after the power failed, making it difficult for people to find exits amid the dense smoke.

Authorities continue to investigate the incident, including whether any safety lapses contributed to the high number of casualties.

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Vietnam boat tragedy kills 15 Indian tourists; PM Modi condoles, rescue efforts continue

At least 15 Indian tourists were killed after a tourist boat capsized near Vietnam’s Phu Quoc Island. Rescue operations are underway and the Indian Embassy has opened emergency control rooms.

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At least 15 Indian tourists were killed after a tourist boat carrying 36 people overturned near Vietnam’s Phu Quoc Island on Saturday. Search and rescue operations remain underway, while the Indian Embassy has established emergency control rooms to assist affected families and coordinate with local authorities.

Boat overturned amid rough weather

According to local media reports, the vessel was carrying 36 people, including 32 Indian tourists, three crew members and one attendant. The boat reportedly capsized shortly after departing Hon May Rut Ngoai Island for An Thoi Port at around 1 pm local time (11:30 am IST).

The accident is believed to have occurred due to rough seas and strong winds, causing everyone on board to fall into the water.

Authorities rescued 21 people and shifted them to hospitals for treatment. Two of the rescued passengers are reported to be in critical condition.

Indian Embassy sets up emergency assistance

The Indian Embassy in Vietnam said it is closely monitoring the situation and has activated emergency control rooms to help affected Indian nationals and their families.

In a statement on X, the Embassy said it was gathering details of the incident while local authorities continued search and rescue efforts.

The Indian Ambassador, along with Embassy officials, is travelling to Phu Quoc Island to oversee consular assistance, coordinate with Vietnamese authorities and support the affected Indian citizens.

Lava Mobiles confirms team members involved

Lava Mobiles said some of its employees and channel partners were among those involved in the accident.

The company stated that it is in constant contact with the Embassy of India in Vietnam and local authorities to obtain updates about the safety and well-being of its personnel. It added that teams in both India and Vietnam are providing all possible assistance to affected families.

Sources said around 110 Lava distributors and employees from South India were on a visit together.

PM Modi, Rahul Gandhi express condolences

Prime Minister Narendra Modi expressed grief over the tragedy and offered condolences to the families of those who lost their lives. He also wished a speedy recovery to the injured survivors and said Indian diplomatic missions were extending all possible assistance while remaining in close contact with Vietnamese authorities.

Leader of Opposition Rahul Gandhi also conveyed his condolences and urged the Government of India and the Ministry of External Affairs to work closely with Vietnamese authorities to support ongoing rescue operations and provide necessary assistance to affected families.

Andhra Pradesh government seeks details

Andhra Pradesh Human Resources Development Minister Nara Lokesh spoke with senior officials after reports indicated that tourists from the state may have been among those affected.

He directed officials to coordinate with the Central Government and ensure all possible support is provided to the victims and their families.

Emergency control room numbers

To assist affected Indian nationals, the Indian mission has opened control rooms at the Consulate General of India in Ho Chi Minh City and the Embassy in Hanoi.

The Ho Chi Minh City control room can be contacted at +84 36 281 7930, +84 91 552 37 14 and +84 33 452 0414.

The Hanoi control room is available at +84 91 308 9165.

The Embassy said both control rooms remain operational for information, assistance and support related to the incident.

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