India-US trade deal: Hope and uncertainty as Trump cuts tariffs - BBC

Importers and trade compliance professionals are closely watching developments in U.S.-India trade relations following an announcement by U.S. President Donald Trump regarding the potential restoration of preferential trade status for some Indian exports. This announcement, made during a Diwali event at the White House on October 25, 2019, signals a potential breakthrough after the U.S. removed India from its Generalized System of Preferences (GSP) program in June 2019.

The GSP program allows certain products from eligible developing countries to enter the United States duty-free. The U.S. had previously cited India's alleged failure to provide "equitable and reasonable access to its markets" as the reason for its removal from the program. Now, the U.S. Trade Representative (USTR) office has confirmed that the U.S. is actively "working with India toward a trade package." India's Commerce Minister Piyush Goyal also indicated that a trade deal with the U.S. is "very close" to being finalized, potentially coinciding with a visit by President Trump to India.

Should a deal be reached, it would primarily affect U.S. importers of Indian goods that were previously eligible for GSP benefits. When India was removed from the GSP program in June 2019, these products became subject to Most-Favored-Nation (MFN) tariffs, meaning they lost their duty-free status. The proposed trade package aims to restore this duty-free treatment for "some Indian exports," though specific product categories have not yet been publicly identified. Conversely, the U.S. is seeking lower tariffs from India on American products such as Harley-Davidson motorcycles and medical devices, indicating a reciprocal negotiation.

For importers and trade compliance officers, the current situation underscores the importance of vigilance. While the announcement offers hope for reduced import costs on certain Indian goods, it is crucial to remember that this is an ongoing negotiation, not a finalized agreement. Importers should continue to monitor official announcements from the USTR and Customs and Border Protection (CBP) for any concrete details regarding the restoration of GSP benefits or other tariff changes. Understanding which specific Harmonized Tariff Schedule of the United States (HTSUS) codes might be affected will be key to preparing for potential adjustments in duty liabilities and supply chain strategies.