Topic: Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora./ Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
5) What do you understand by Generalized System of Preferences (GSP)? Critically analyze its significance in India-US trade? (250 words)
Why this question:
The article is in the backdrop of the Trump’s declaration of the end of preferential trade terms for India under the Generalized System of Preferences (GSP) programme. The article provides for more details on the same.
Key demand of the question:
The answer should discuss the following – What is Generalized System of Preferences (GSP) , its objectives, historical context with respect to Indo-US economic relations, did it benefit India in the past and what will be the consequences of it on India due to this move.
Critically analyze – When asked to analyze, you have to examine methodically the structure or nature of the topic by separating it into component parts and present them as a whole in a summary. When ‘critically’ is suffixed or prefixed to a directive, one needs to look at the good and bad of the topic and give a fair judgement.
Structure of the answer
Discuss the context of GSP in Indo – US economic relations.
Discussion of the answer should capture the following points :
- How the withdrawal of the GSP benefit is expected to adversely affect exports from India.
- What is the objective of GSP?
- Who are the beneficiaries under GSP?
- Which are the product groups covered under GSP?
- What is the difference between GSP and the usual trade arrangement under WTO?
- What is the new Trump administration’s approach on GSP?
- Impact of GSP withdrawal on India.
Conclude with the impact that the removal of GSP indicate a tough trade position by the US; especially for countries like India who benefited much from the scheme.