US threatens to scrap India’s preferential trade treatment
New Delhi, March 6: US insistence that India import dairy products sourced from animals that are fed blood meal may prove a hurdle in New Delhi’s efforts to get reinstated into a coveted list of countries enjoying duty-free exports to the US.
India has cited “cultural and religious sentiments” to take a “non-negotiable” stand against US demand. Non-agreement on this issue is one of the major reasons why US President Donald Trump said on Tuesday that he intends to end preferential trade treatment for India under generalized system of preferences (GSP) that allows $5.6 billion worth of Indian exports to enter the US duty-free.
“India has clarified that while our certification requirement is non-negotiable given the cultural and religious sentiment, the requested simplified dairy certification procedure, without diluting this requirement, could be considered,” said a statement by the Ministry of Commerce.
Under Indian norms for the import of milk and milk products, the importer or manufacturer must certify that “the source animals have never been fed with feeds produced from internal organs, blood meal and tissues of ruminant origin.”
Sources in the commerce ministry said they are ready to deliberate with the US within the 60-day period, the duration after which Trump’s decision will take effect so that India keeps receiving GSP benefits.
“However, the issue of US wanting India to import dairy products sourced from animals fed with blood meal cannot be flexed,” said a ministry official on condition of anonymity.
The US has time and again invoked scientific studies to suggest that the blood meal and tissues of ruminant origin in the cattle feed get absorbed into their system in three months, while the Indian side wanted Americans to certify that their animals had “never” been fed on a non-vegetarian diet as mentioned above or with beef.
The US dairy industry claims that if India provides market access, exports would increase by up to $100 million. This is one of the major reasons why the US believes that India shouldn’t be given a continued waiver.
On the other hand, India’s stand has been upheld since 2003 when the Atal Bihari Vajpayee administration maintained that all imported dairy products be derived from animals that have never consumed anything containing “internal organs, blood meal, or tissues of ruminant origin”.
The current NDA government has been basing its arguments on article 20 (a) of the General Agreement on Tariffs and Trade (GATT), 1994 which states that members can adopt or enforce measures that are “necessary to protect public morals”.
Apart from this, Washington has demanded lower rates on seven tariff lines, including mobile phones, smart-watches, and telecom network equipment. The import duty on these is 20 percent, yielding revenue of $3.2 billion to India.
Copy Edited by Adam Rizvi