Ahead Of Visit, Trump Upsets Trade Ties With India, Removes It From List Of 'Developing Countries'

The United States' government on February 10, removed India from its list of 'developing countries' that are exempted from investigations into whether they harm American industry with unfairly subsidised exports.

Stating that the old guidelines (used for tagging a country as 'developing') which dated back to 1998 are now "obsolete", the United States Trade Representative (USTR) removed a line of countries including Brazil, Indonesia, Hong Kong, South Africa and Argentina from getting special preferences under the methodology for 'countervailing duty' (CVD) investigations.

The US removed India from the list of 'developing countries' on account of it being a G-20 member and having a share of 0.5% or more of world trade.

"For purposes of US CVD law, the USTR, therefore, considers countries with a share of 0.5% or more of world trade to be developed countries," the USTR said in a federal notice. India's share in global exports was 1.67% in 2018. In global imports, it was 2.57%.

United States President Donald Trump had obliterated India from its list of 'developing countries' under the Generalised System of Preference (GSP) for availing trade benefits. This had been announced by the US President in the first week of June last year and the US government's new decision to remove India from the USTR list has cast a shadow on India wanting to restore its previous benefits under GSP as part of its trade talks with the US.

This declaration has come close on the heels of Trump's visit to India on February 24.

In July last year, Trump directed his administration to change rules to prevent "self-declared developing countries from availing themselves of flexibilities" in global trade, saying that nearly two-thirds of World Trade Organization members had been able to avail themselves of special treatment and take on weaker commitments by designating themselves as 'developing countries'.

The Shiv Sena editorial, Saamana, has criticized the decision by the US to remove India from the list of developing countries. Shiv Sena said that this step is a big setback for the Indian economy. The Shiv Sena has written, "Being a developing country, India used to get huge tax concessions from the US for its production and export till date, but now Indian business in America has suffered a tremendous blow."

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