File photo of U.S. president Donald Trump and Prime Minister Narendra Modi.
Hours after US President Donald Trump announced his decision to end preferential trade treatment for India, the government today said that the move will not have a "significant impact".
At President Donald Trump's direction, the USA on Monday announced its intention to terminate preferential tariff systems for Turkey and India which are aimed at bolstering the trading prospects of developing nations.
Trump has justified his move by accusing India of failing to provide the U.S. with enough access to its markets.
The move against India and Turkey came as the USA and China seek to negotiate an exit from a costly trade war between the two countries that is part of the Trump administration's efforts to address what it views as inequitable commercial relationships with other states.
The US goods and services trade deficit with India was $27.3 billion in 2017, according to the US Trade Representative's Office.
With Donald Trump determined to end what he calls "unfair" trade practices by USA allies, the move is set to become the strongest punitive action against India so far.
Trump is reported to have said on Monday that New Delhi had "not assured" the United States that it would "provide equitable and reasonable access" to the markets of India.
Pakistan 'shoots down two Indian jets' over Kashmir
The injured pilot was being treated at a military hospital, Ghafoor told a news conference in the garrison town of Rawalpindi . The strikes were the deepest inside Pakistani territory since the neighboring countries last went to war over Kashmir in 1971.
The decision comes as the U.S. is reported to be making headway in trade negotiations with China aimed mainly at cutting American trade deficits with a deal expected soon. "The GSP system is envisaged as a non-reciprocal benefit to developing countries".
Reacting to the move, a top Indian trade official said New Delhi does not plan to impose retaliatory tariffs on USA goods.
"We had worked out a meaningful package that covered the US' concerns but they made additional requests which were not acceptable at this time", he added.
"The withdrawal of GSP benefits to India will have a minimal and moderate impact", Mr. Wadhawan said at a press conference. "GSP is more symbolic of the strategic relationship, not in value terms".
That followed a drive by New Delhi to force global card payments companies such as Mastercard Inc and Visa Inc to move their data to India and higher tariffs on electronic products and smartphones. "Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion", the trade representative's office added.
India's trade ministry said in a statement that the trade deficit with the United States was falling and in 2018 it is estimated to have narrowed by over $4 billion.
Under an agreement taking shape, Beijing would lower some barriers on U.S. companies' operations in China and purchase large amounts American agricultural and energy goods if the United States lowered most of the tariffs in return. It would fall further because of India's rising demand for energy and civilian aircraft, it said.