India America Trade
India is the biggest beneficiary of the GSP.

US President Donald Trump said on Saturday (local time) terminated the United States preferential trade programme with India. The trade preference programme with India will be terminated from June 5, 2019, according to a White House official.

Trump announced in March he would end India's access to the decades-old Generalized System of Preferences (GSP) trade programme over what the US said was lack of access to India's market. The programme allows emerging countries to export goods to the United States without paying duties.

"I have determined that India has not assured the United States that India will provide equitable and reasonable access to its markets," Trump said in a statement on Friday.

The US law requires the administration to wait 60 days after it notifies Congress of the move before it formally ends India's participation in the programme. Trump notified Congress of the move in early March.

"There is every reason to believe that GSP suspension will move forward," the official told reporters. "What is important is that the interest is to resolve trade irritants - to ensure fair and equitable market access," the official added.

But the official said the benefits could be restored if India gave US companies fair and equitable access to its markets.

India is the biggest beneficiary of the GSP, which allows preferential duty-free imports of up to $5.6 billion from the South Asian nation.

Indian officials have raised the prospect of higher import duties on more than 20 US goods if Trump drops India from the program.

Twenty-four members of the US Congress sent the administration a letter on May 3 urging it not to terminate India's access to the GSP.