The Many Shades Of India-US Relations

India and the United States have locked horns over trade measures of late, but our intangible relations still click in bilateral relations.

- Manish Kumar Jha

India lost its trade privileges with the United States and ceased to be a beneficiary of the Generalized System of Preferences (GSP). President Donald Trump announced, “I have determined that India has not assured the United States that it will provide equitable and reasonable access to its markets. Accordingly, it is appropriate to terminate India’s designation as a beneficiary developing country effective June 5, 2019.”

The GSP program was introduced in 1976 to promote economic growth in developing countries and allowed duty-free export of certain products from these nations to the United States. Indian exports within the ambit of the GSP are worth $5.6 billion and some 3,000 items now lose duty-free access to the US market.

President Trump’s diktat on GSP was actually the second blip in the hitherto cordial relations between India and the United States. The first occurred when the US proposed raising the application fee of H-1B visas, which when implemented, will increase costs of IT firms doing business in the US. The visa is a temporary permit to work in the US. The H-1B visa approvals of the top seven Indian IT companies dropped 43 percent from 14,792 in 2015 to 8,468 in 2017, according to the US think-tank, the National Foundation for American Policy.