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NEW DELHI, May 21

THE Federation of Indian Chambers of Commerce & Industry (FICCI) has called upon the United States Trade Representative (USTR) to restore, with immediate effect, the GSP (Generalised System of Preferences) benefit for Indian exports of chemicals and allied products that were taken off the list in 1992 due to lack of protection for intellectual property rights in the country .

In view of the country's compliance with the WTO agreement on TRIPS, FICCI said that there is simply no rational behind US denial of the duty-free benefit to Indian exports of these products.

Currently, around 764 tariff lines (at 8-digit level) are excluded from the US GSP programme and most of these tariff lines fall under the area of chemicals and allied products. For these select items, FICCI analysis reveals, in 2002 the country's total exports to the US stood at $678.5 million of which only $87 million was admitted duty-free under the GSP programme.

For all but three of these product-groups, the country share in US global imports was marginal (less than 1 per cent).

FICCI pointed out that restoring GSP benefits to these items would result in a relatively modest loss of tariff revenue for the US. Going by the level of US imports from India last year, FICCI estimates put the potential loss of US tariff revenue at around $22 million even if the duty-free benefit is extended to all the identified product groups (of course, the amount may be somewhat higher if the restoration yields significant rise in exports from the country ).

On the other hand, it will lead to considerable saving in cost saving for American consumers and manufacturers, and thereby at least partially offset the revenue loss.

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