Industry body Ficci Monday called for a dialogue between India and the US to find a workable solution on America's decision to roll back export incentives to domestic players under the Generalized System of Preferences (GSP) programme.
"With the new government in place, we should resort to dialogue and try to reverse the US decision of termination of benefits under GSP for Indian products," Ficci said in a statement.
The US has said it will withdraw incentives provided to Indian exporters under its GSP programme with effect from June 5, a move that could impact exports worth USD 5.6 billion to the US from India.
It also said the US decision will have short-term impact on bilateral trade, but this should be seen in the overall context of US actions to protect its trade interests globally.
"If not resolved amicably, it may, however, impact the spirit of India-US relationship which has a huge growth potential," it said adding the bilateral relationship needs to be seen by both the countries from a larger canvas and a long-term strategic cooperation in defence, energy and geo-strategic opportunities like the Indo-Pacific.
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It said India has displayed lot of goodwill by not retaliating on steel and aluminium tariffs by the US.
"We seek similar understanding from the US on such issues," it added.
The chamber said that in 2017, USD 5.6 billion worth of products were exported by India to the US under the GSP.
The goods exported under this scheme were primarily intermediaries and played an important complementary role for US manufacturers.
"The withdrawal of GSP benefits would hurt these US manufacturers by adversely impacting their cost advantage," Ficci said adding the trade deficit is also coming down with India's growing strategic engagement with the US particularly in the oil and gas, defence and aviation sectors.
The requirement imposed by India on the dairy and milk products, that the products be derived from animals which have never consumed any feeds containing internal organs, blood meal, or tissues of ruminant origin are in line with the sentiments of the society at large.
The other issue, it said, on price control on medical devices is not to restrict imports but in order to make essential medical devices affordable to a large section of the population.
"Indians spend only 6 per cent of their income on health and education, and income levels are low due to which price control of medicines and medical devices are important," the chamber said.
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