Apparel April 2019 Apparel May 2019 issue | Page 54

INDUSTRY INSIGHTS
WILL THE US REVOKE
INDIA’S GSP STATUS?
Samir Alam explores the looming threat of the US government revoking India’s
GSP status and what it may mean for Indian apparel.
Global trade is a complex and vast enterprise
which can foster or destroy the fates of nations.
For India, maintaining positive trade relationships
with world nations has been both a diplomatic
and economic endeavour, a strategy that
determines how quickly and effectively it can help
grow India’s standing on the world stage. This
is why the March announcement by the United
States Trade Representative (USTR) came as
a great surprise. The USTR, under instructions
from the Trump government, announced that it
intends to terminate the Generalized System of
Preferences (GSP) treatment under which India
operates. For most people, the GSP treatment
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may seem like a new or unknown concept, but
it has far-reaching consequences on export
businesses like the ready-made goods industry.
Let’s look at what the revocation of GSP would
mean for Indian apparel.
UNDERSTANDING GSP
Historically, the trade between nations hasn’t
been equitable. Due to the simple nature of free
market capitalism, it is usually the more powerful
nations who dominate the relationship and exploit
weaker partners. During the early periods of
modern globalisation, this was recognised as
being a major detriment to sustainable long-term