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Trump expels India’s 5.68n dollar deal

U.S. President Donald J. Trump ended India’s trade deal which allowed more than 5.6 billion Indian goods a duty free entry, after Indian Government unveiled new rules on e-commerce which imposed limitations on the business of American Internet retail giants, Amazon and Wal-Mart Inc-backed Flipkart.

The new Indian e-commerce rules also forced global card payment companies like Visa and MasterCard to move their data to India as well as placing higher tariffs on electronic products and smartphones.

The US President, Donald Trump, further explained about his move in a letter to congressional leaders: “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’s prime minister, Narendra Modi, greets US president Donald Trump in 2017. Trump has scrapped preferential trade terms for India as well as Turkey.

The move marks a strong vow from Trump, who has repeatedly called out the high Indian tariff rates, to cut US trade deficits.

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Trump further explained to the media saying that the move was prompted by lack of assurances from New Delhi that “it will provide equitable and reasonable access to the markets of India.”

The US Trade Representatives Office also issued a statement soon after, accusing India of bringing in a ,“wide array of trade barriers that create serious negative effects on United States commerce”.

The US Trade Representative’s Office further clarified that the complete removal of the said concessions would take at least 60 more days after notification to Congress and the Indian Government and would be done via a presidential proclamation.

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Ajay Sahai, the director general of the Federation of Indian Export Organizations, said the US move, which would result in an increase of tariffs between 2-3 percent on the exempted goods, is most likely to hit leather, food processing, textile and few engineering goods. He, however, warned that the removal of preferential treatment would also in turn hurt US companies which import Indian intermediate and semi-finished goods as raw materials on the cheap. India had been the world’s biggest beneficiary of America’s Generalized System of Preferences (GSP) program, which was launched in the 1970s to help poor and developing companies grow their economies by encouraging trade.

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Many trade experts have further said that India, now one of the world’s biggest economy, has graduated out of the program, which was originally meant for poor and developing countries to encourage trade. The Indian Government responded to the US decision by saying that it does not wish to impose retaliatory tariffs on US goods, further elaborating that the “actual benefit” of the said deal was just $250m a year. Trade official Anup Wadhawan responded on Tuesday saying that the two countries had long been working on a trade package to address each other’s concerns.

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