Skip navigation
Manufacturing Savvy

Should India Lose Its US Duty-Free Status?

Yes, would be the answer from the Information Technology and Innovation Foundation (ITIF).

Just a few days ago, Jan. 21, reports were circulating that India was preparing to exclude foreign information and communications technology  vendors from participating in the country’s $4 billion national optical fiber network project.

Last February the Indian Ministry of Communications and Information Technology announced a preferential market access mandate for electronic goods, which if implemented would require a large percentage of high-tech goods sold in India to be manufactured there.

The mandate means that a specified share of each product’s market—anywhere from 30% to possibly even 100%—would have to be filled by India-based manufacturers, with the local content share for each product rising over time. One of the goals is to have 80% of the computers and electronics sold in India be manufactured domestically by 2020.

This requirement is already being applied to public procurements

Those two, and other, anti-free trade moves have caused this group to call for the US to withdraw India’s Generalized System of Preferences (GSP) status, which provides duty-free entry to the U.S. for a variety of Indian products and services, if India does not rescind the measures.

“If India continues to prevent open access to their markets, the United States must take action to address measures that not only harm the U.S. and other foreign enterprises but also damage India’s own economy and the broader global trading system” notes Stephen Ezell, senior policy analyst with ITIF.

“These actions contravene GATT and WTO free trade provisions and will ultimately hurt Indian companies in the global market,” Ezell adds. “India can realize its goals and better attract globally mobile investment if it focuses on enacting a range of policies that enhance the underlying competitiveness of its economy and enterprises without disincentivizing international trade.”

For more information see Ezell’s blog post.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.