A shock for me to hear that India is out from the list of developing countries hence all the benefits India used to get under US’s GSP earlier can’t be reclaimed.
As a developing country, Indian exporters had tariff-free access to the United States until June now by GSP (Generalized System of preferences), when all benefits were suspended. Reports of Business Standard
After the lockdown, we all know the condition of the poor people of India. They are in constant fear that if not CoronaVirus, hunger might kill them.
Migrants flocking in thousands at bus terminals, having been walked for days to reach bus stands, some being run over by Trucks on road, dying of exhaustion as they walk all the way hundreds of kilometres to their natives and some surviving only on biscuits and water due to this lockdown.
And millions of people in our country fall below the poverty line, they are daily wage earners.
The sudden banishment of migrant labour would have a far-reaching impact on the Indian economy and states should be prepared to deal with it.
How to differentiate between developed and developing countries.
Gross Domestic Product per capita (GDP) is the prime factor.
GDP is calculated by dividing a country’s GDP by its population, tallies of all the goods and services produced in a country in one year is a useful metric for categorizing countries as either developed or developing nations.
India ranks third with $9.47 GDP-PPP in USD trillions according to 2017 est. after the United States($ 19.39)and China($23.26) in the GDP-PPP rank.
GSP is given to countries with lower than 0.5 per cent share (as per US government estimates) in global trade. But, India’s share by 2017 was 2.1 per cent for exports and 2.6 per cent for imports, per which it has long been ineligible for the scheme, the office said.
The USTR’s office further posited that, since India is part of the G20 alongside Argentina, Brazil, Indonesia and South Africa, these can all be classified as developed economies.
Commerce and Industry Minister Piyush Goyal has said India does not need development assistances like GSP hitherto provided by other nations and should be able to become competitive on its own, the issue has continued to be part of trade talks between India and the US. On the other hand, traders have pointed out Indian export remained under pressure due to increasing competition from low-cost rivals, and that surrendering GSP claims would mean handing away market share.
While useful for a snapshot of the world’s economic powerhouse, such measures are also harsh. Countries obviously have different populations, which means that looking entirely at GDP can misrepresent fact and/or be so apparent as to be irrelevant.
India is the largest beneficiary nation under the GSP, with total benefits from tariff exemptions amounting to $260 million in 2018, according to the data from the USTR’s office.
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