Indian Gems export down |
The withdrawal of benefits to Indian exports by the US government, under the Generalized System of Preferences (GSP) will have limited impact on India`s overall export trade. The withdrawal came into effect from June 5, as was announced by the US earlier. "The withdrawal of GSP will affect exporters of gems & jewellery the most because nearly 15 percent of such exports availed of its benefits in calendar 2018. Now there will be an additional duty of nearly 7 percent on exports of precious metal-based and imitation jewellery. It will reduce competitiveness of domestic exporters and put pressure on margins. The US accounts for over 15 per cent of India`s exports of goods, though from a US perspective, imports from India are barely 2 percent of the pie. The US`s trade deficit with India has declined over the past five years, from $31 billion in 2014 to $24.2 billion in 2018. This is because India`s exports to the US have logged a CAGR of 6 per cent, while its imports from the US have run up at 11 per cent. In 2018, India`s trade with the US came to $142.1 billion, of which, exports were $83.2 billion. Within exports, that under GSP is estimated to be 7.5-7.8 per cent.
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