Trump’s Intent To Drop GSP For Indian Exports Might Cripple RMG


The alarm bells are ringing for the Indian textile industry with the United States President Donald Trump sounding his intentions to terminate the preferential trade status that India has been enjoying for purpose of exports.

The Generalized System of Preferences (GSP) under which developing and under-developed countries receive incentives which are not extended to developed countries is seen as a boon in the third world nations. Trump’s decision to remove India from the GSP list is seen as a possible body blow if the RMG sector in the country is included in the list of products slated for withdrawal.

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Rahul Mehta, President of the Clothing Manufacturers’ Association (CMAI), cited figures stating that nearly 35% of India’s RMG exports will be adversely affected if this decision is taken. He pointed out that nearly 30 to 35% of the RMG products are slated for the American markets.

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Veteran observers in the industry opined that the Indian government must offset the stiff duty by lending subsidies and the government should also take a leaf from the books of the US by introducing protectionism. Right now India’s exports in RMG sector are in the decline and in need of incentives and subsidies. However, industry experts opined that under the current circumstances, the impact on RMG exports will be marginal.

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