1.India could lose a vital US trade concession, under which it enjoys zero tariffs on $5.6 billion of exports to the United States, amid a widening dispute over its trade and investment policies.
2.The move to withdraw the generalised system of preferences (GSP) from India, the world’s largest beneficiary of a scheme that has been in force since the 1970s, would be the strongest punitive action by the US Government.
3.Generalised System of Preferences (GSP) is a preferential tariff system extended by developed countries to developing countries (also known as preference receiving countries or beneficiary countries). It is a preferential arrangement in the sense that it allows concessional low/zero tariff imports from developing countries.
4.The trigger for the latest downturn in trade ties was due to following reasons
A) India’s new rules on e-commerce which restricts players from selling the products of companies in which they have a stake, and capping the percentage of inventory that a vendor can sell through a marketplace entity (IT platform of an e-commerce entity) or its group companies.
B) India last year had announced proposals to force foreign companies to store more of their user data locally, in a bid to better conduct legal investigations which forced global card payments companies such as Mastercard and Visa to move their data to India.