What is GSP?
The Generalized System of Preferences (GSP) is a U.S. trade program designed to promote
economic growth in the developing world by providing preferential duty-free
entry for up to 4,800 products from 129 designated beneficiary countries and
territories. GSP was instituted on January 1, 1976, by the Trade
Act of 1974.
India and GSP
About 2,000 products, including auto
components and textiles, can enter the US duty-free if the beneficiary
developing country meet the eligibility criteria.
India was the largest beneficiary of
the GSP programme in 2017 with $5.7 billion in imports to the US given
duty-free status.
Why the US is planning to withdraw GSP
for India?
President Trump has accused India of
failing to ensure the US of “equitable and reasonable” access to its markets.
The US is pressing India to reduce US trade deficits and has repeatedly called
out India for high tariffs.
Withdrawal of GSP is part of the
President Trumps plan to redress what it considers to be unfair trading
relationships.
India has sought talks with the US to avoid the withdrawal of the trade benefits under the GSP. India has offered a trade package to the US which promises of about Rs 35,000 crore annually in oil and gas imports from the US and another Rs 1,00,000 lakh crore in defence orders in the coming years.
The US and India both nations go through up and downs. There are events when two countries lock horns against one another, and sometimes the deal is done with peace. The bilateral relationship is important for the world’s prosperity and peace.
India has
signed for Sig Sauer of the US
After repeated attempts to equip the infantry soldier with a
basic rifle, the Army on February 12 signed a contract with Sig Sauer of the
U.S. for 72,400 SIG 716 assault rifles for the frontline soldier deployed in
operational areas.
India and United States of America- were not friends initially.
India and US have worked on strong bilateral
relationship. Bilateral relationships are mandatory for stability and
prosperity of the world.
When India got her independence in 1947, even
though Jawaharlal Nehru liked the American Imperialism, he propagated
Non-Alignment Principle. That indicated that India was supporting or joining
formally neither United States of America nor Soviet Union or Russia.
India followed a socialist model in maintaining
economy, and was suspicious about United States. As a result, India leaned
towards USSR or Soviet Union or Russia.
As the ideological Cold War ended after a myriad
of international convergences and divergences, India was forced to look West
given the paradigm shift in the geopolitics of the world and in Francis
Fukuyama’s words “End of History”. Today both India and US are among the most
vibrant foreign cohorts and strategic partners.
India-USA: Major Events in History
The birth of Indian Republic was accompanied by
Pakistan’s occupation of Kashmir. Nehru’s efforts to garner support from the
international community was fruitless.
India Pushed China’s membership in United Nations while America
wanted India to join
India declined the American offer to accept a
seat at the United Nations Security Council and rather pushed for the
membership of the People’s Republic of China which it has immediately recognized as a sovereign nation.
In the year 1950, India abstained from a US-sponsored
resolution calling for UN’s military involvement in the Korean War. India even
voted against UN forces crossing the 38th Parallel and naming China
as an aggressor.
India – Pakistan’s Conflict and The United States
1955: Pakistan
officially aligned with the United States via the South East Asian Treaty
Organization (SEATO) and Central Treaty Organization (CEATO) also known as
Baghdad Pact.
Pakistan became an important ally to the US in
the containment of the Soviet Union, giving rise to strategic complications
with India.
Meanwhile, India, being the chief proponent of
Non-Alignment Movement (NAM), held the first Afro-Asian Conference at Bandung, Indonesia.
This clearly indicated that India was not interested in being ally.
India – China War and the friendly gesture of US
In the Sino-Indian war of 1962, the US extended help to
India against China’s belligerence by sending an American carrier- The
Enterprise- to the Bay of Bengal. China, however, had declared unilateral
ceasefire the next day. Indian leaders and public welcomed American
intervention.
India criticised US, and grains shipments were
restricted for India
1966: During 1966, In
response to India’s criticism of the US intervention in Vietnam, President
Lyndon B. Johnson restricted the supply of grain shipments to India under
Public Law 480 programme.
India rejected a founding membership of ASEAN
1967: A predominantly
Anti-American worldview led India to reject a founding membership in the
Association of Southeast Asian Nations (ASEAN).
India rejected NPT
1968: India rejected
the Non-Proliferation Treaty (NPT) proposed by the world’s leading nuclear
powers.
US remained silent on Pakistan’s repressive policies
in East Pakistan
In 1971, The USA had
maintained a studious silence on Pakistan’s repressive policies in East
Pakistan. The then Secretary of State Henry Kissinger visited Delhi to make
India comply to
not support liberation movements in East Pakistan.
Indira Gandhi’s intransigence was met with
diplomatic muscle-flexing. Next month, India signed a Treaty of Friendship,
Peace and Cooperation with the Soviet Union, seen as a blatant shift from
India’s Non-Alignment policies.
US President Richard Nixon in a retaliatory move
chose to explicitly tilt American policy in favour of Pakistan and suspended
$87 million worth of economic aid to India. American naval fleet USS Enterprise
traversed the Bay of Bengal, issuing mild threats. India won the Bangladesh
Liberation War as the Pakistani Army embarrassingly surrendered more than
90,000 troops.
India tested Nuclear Weapon
In, 1974 India conducted
its first nuclear weapon test at Pokhran, and it came as a major jolt to the
USA who made plans to upgrade its presence at Diego Garcia, a
British-controlled island in the Indian ocean.
During 1975 India faced
considerable domestic turmoil and entered into a state of Emergency. The
Emergency ended in 1977 and the US immediately eased restrictions it has placed
on World Bank loans to India and approved direct economic assistance of $60
million.
Indian and American national personalities visit each
other’s Nations.
In 1978 US President Jimmy
Carter and Indian Prime Minister Desai exchanged visits to each other’s
nations. However, this also did not normalise the relations between India and
US.
Huge Military Aid to Pakistan to fight against the Soviet Union
in Afghanistan
The 1980s:
Large amounts of military aid was pumped into Pakistan by the USA in order to
fight a proxy against the Soviet Union in Afghanistan.
This created significant repercussions in the
internal security of India as the Pakistani mujahedeen fighters infiltrated
into Kashmir as militants.
Rajiv Gandhi visits China
In 1988 Prime Minister
Rajiv Gandhi made a historic visit to China which led to normalization of
relations between India and China.
India provided logistic support for American Military
during Gulf War
1990: India
hesitatingly provided a brief logistical support for American military
operations in the Gulf War.
The Soviet Union disintegrated into independent nations post 1991 and the United States emerged
as the single largest hegemon, making the world unipolar.
It coincided with India opening doors to foreign private capital in its
historic Liberalization, Privatization, and Globalization move.
Trade between India and the US grew dramatically
and is flourishing today.
Why India Matters to the USA?
India’s growing national capabilities give it
ever greater tools to pursue its national interests to the benefit of the
United States. India has the world’s third-largest Army, fourth-largest Air
Force, and fifth largest Navy. All three of these services are modernizing, and
the Indian Air Force and Indian Navy have world-class technical resources, and
its Army is seeking more of them, which provides for better buyer for US.
India is an important U.S. partner in
international efforts to prevent the further spread of weapons of mass
destruction.
India’s broad diplomatic ties globally (most
importantly in the Middle East), its aspirations for United Nations (UN)
Security Council permanent membership, and its role in international
organizations such as the International Atomic Energy Agency makes New Delhi an
especially effective voice in calls to halt proliferation.
India’s position against radicalism and
terrorism corresponds with that of the United States.
India’s English-speaking and Western-oriented
elite and middle classes comfortably partner with their counterparts in U.S.
firms and institutions, including more than 2.8 million Indian Americans. The
U.S. higher education system is an incubator of future collaboration, with more
than 100,000 Indian students in American universities.
As India modernizes and grows it will spend
trillions of dollars on infrastructure, transportation, energy production and
distribution, and defence hardware. U.S. firms can benefit immensely by
providing expertise and technology that India will need to carry out this
sweeping transformation.
India-USA cooperation is critical to global
action against climate change.
India is genuinely committed to a world order
based on multilateral institutions and cooperation and the evolution of
accepted international norms leading to accepted international law.
Indian culture and diplomacy have generated
goodwill in its extended neighbourhood. New Delhi has positive relations with
critical states in the Middle East, in Central Asia, in Southeast Asia, and
with important middle powers such as Brazil, South Africa, and Japan—all of the
strategic value to the United States. India’s soft power is manifest in wide
swaths of the world where its civil society has made a growing and positive
impression.
Indian democracy has prospered despite endemic
poverty; extraordinary ethnic, religious, and linguistic diversity; and foreign
and internal conflicts
India is an indispensable partner for the United
States. Geographically, it sits between the two most immediate problematic
regions for U.S. national interests. The arc of instability that begins in
North Africa goes through the Middle East, and proceeds to Pakistan and
Afghanistan ends at India’s western border.
The Indian landmass juts into the ocean that
bears its name. With the rise of Asian economies, the Indian Ocean is home to
critical global lines of communication, with perhaps 50 percent of world
container products and up to 70 percent of ship-borne oil and petroleum traffic
transiting through its waters.
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