Apparel April 2019 Apparel May 2019 issue | Page 56

INDUSTRY INSIGHTS
IT IS UNDENIABLE THAT THE
REVOCATION OF GSP WILL LEAD TO
SIGNIFICANT LOSSES FOR INDIAN
EXPORTS, BUT WHAT IS MORE
APPEALING IS THAT IT IS MOTIVATED
BY PLEASING CORPORATE
INTERESTS AT THE EXPENSE OF
INDIA’S FINANCE AND TRADE NEEDS.
and dairy products. This was most evident when
in April 2018, the USTR commenced a review
of India’s GSP status under lobbying from the
National Milk Producers Federation, the US
Dairy Export Council, and the Advanced Medical
Technology Association. Under the influence
of these two powerful trade bodies, the US
government began to take steps to ‘motivate’ or
rather threaten India’s trade autonomy.
50
I APPAREL I
May 2019
It is undeniable that the revocation of GSP will
lead to significant losses for Indian exports, but
what is more appealing is that it is motivated by
pleasing corporate interests at the expense of
India’s finance and trade needs. Moreover, the
Indian government has said that the expectation
of reciprocity of the US such as assurances on
market access violates the terms of the Trade
Act, which strives to maintain non-discriminatory
and non-reciprocal benefits from developing
countries. This declaration is clearly marked in the
WTO’s 1979 Enabling Clause, and its assertion
during the election period only serves to act as
a means of coercing Indian trade policies and
influencing its elections.
IMPACT ON APPAREL
Apart from the legal and policy-related
implications of the GSP revocation, it is important
to assess this shift in metric terms. According to
the Indian government’s own press statements,
the GSP concessions offered by the US only
effected duty reduction of about US$190 million
per year. However, the US International Trade
Commission (US ITC) offers a contradictory
number. According to the US, GSP exemptions
have increased year-over-year, from US$4.7
billion in 2016 to US$5.6 billion in 2017 to
US$6.2 billion in 2018.
The apparel and textile sector in particular
has a major export relationship with the US,
with nearly US$7.2 billion in exports. This export
list is constituted by nearly 136 core textile and
apparel products which are produced in mid-
range quantities in India. These include ready-
made goods like women’s dresses, shawls and
silk-based goods which will not suffer significantly
due to the GSP revocation. The Apparel Export
Promotion Council has identified 15 products