Centre Out With Scheme To Counter US GSP Revoke


As a counter move to US President Donald Trump’s decision to scrap Generalized System of Preferences (GSP) which India had enjoyed so far, the union government gave the green signal to float a scheme that will render exports of apparel and home textiles more competitive. The government’s response came into effect two days after the US decision on stripping India of GSP.

The government’s formal approval of the scheme took place at a cabinet meeting that was presided over by Prime Minister Narendra Modi. The scheme that was floated mandated that rebate of all embedded state and central taxes and levies for apparel and made-ups segments would make exports zero-rated.

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The cabinet later made an official statement that said, “The move is expected to boost India’s competitiveness in export markets and ensure equitable and inclusive growth of the textile and apparel sector.” Experts in the Indian textile sector opined that despite revoke of GSP by the US, the domestic textile and apparel sector will not be impacted.

“GSP revoke on the existing products is unlikely to affect India’s garment export. However, there is an apprehension that the revoke of GSP will expand covering other products like Ready Made Garments (RMG). Rahul Mehta, president of Clothing Manufacturers’ Association expressed this apprehension, stating, “If it were to happen it will affect nearly 30% to 35% of India’s garment exports.”

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The Indian Apparel Exports Promotion Council (APEC) made a press statement which said, “The US imports USD 586.58 million worth of RMG products from different countries under the GSP status and India’s share is USD 17.97 million.

President of Tirupur Exporters Association Raja M Shanmugam said job losses because of this move cannot be ruled out though at present the impact seems to be marginal.

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