Generalised System of Preferences (GSP)
Historical Backdrop
The Generalised System of Preferences (GSP) is a non-reciprocal preferential tariff arrangement under which developed countries grant reduced or zero tariffs to exports from developing countries. India was the largest single-country beneficiary of the US GSP programme, with approximately USD 5.6 billion worth of exports benefitting from preferential duties (before the 2019 withdrawal).
In June 2019, the US terminated India's GSP designation, citing India's failure to provide "equitable and reasonable access" to its markets — specifically referencing barriers to US dairy and medical device exports. This withdrawal left Indian exports facing standard MFN tariffs. The absence of a preferential framework since 2019, combined with the Trump administration's 2025 reciprocal tariff announcement (26% on Indian goods), underscores the strategic urgency of a new bilateral arrangement.
- GSP created under the Trade Act of 1974 (US); part of UNCTAD's framework from 1968.
- India was the largest GSP beneficiary in 2017 (largest single country).
- GSP withdrawal effective June 5, 2019.
- India retaliated with countervailing tariffs on 29 US product categories.
● Tracked since February 22, 2026 · last seen June 24, 2026 · updates as the daily brief publishes