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File photo of U.S. president Donald Trump and Prime Minister Narendra Modi.

Pekcan's comments on Tuesday came a day after the U.S. trade chief's office announced that his country meant to scrap the preferential trade status granted to India and Turkey at President Donald Trump's orders.

The President has been on a warpath against what he said were high tariffs on USA imports to India.

The US goods trade deficit with India was $22.9 billion in 2017.

"I will continue to assess whether the Government of India is providing equitable and reasonable access to its markets, in accordance with the GSP eligibility criteria", the President wrote in the letter sent to Congress.

"In April 2018, the U.S. initiated a review of our GSP benefits, mainly on two industries medical devices and dairy".

That sentiment has fuelled a damaging trade war between Washington and Beijing.

The US dairy industry was a strong advocate of ending the GSP for India citing its difficulties in exporting to India. Commerce Secretary Anup Wadhawan told the media Tuesday that the withdrawal will not have much impact on India's exports to the United States, which stand at around $40 billion.

Turkey's designation was terminated as it was discovered that the Eastern European country was "economically developed and should no longer benefit from preferential market access", it said.

United States trade officials said Mr Trump's measure would take 60 days to come into effect after official notifications to Congress and the Indian government.

According to sources in the Ministry of External Affairs, both sides had been discussing and negotiating this package for over seven or eight months now, and so, India was under the impression that the United States would not make a move on the GSP.

"Modi has claimed that his personal diplomacy with leaders like Trump has led to benefits for India", Mihir Sharma said.

"There will surely not be any significant impact on our exports or any statistical edge to our competitors", Wadhwan said, adding that India charges tariffs well in line with standards set by The World Trade Organization.

Especially as the Indian election approaches, Trump's decision could well get sucked into the febrile campaign atmosphere of domestic politics.

In 2017, the United States protested against India's decision to cap prices of medical devices. The two countries have had differences over the restrictions placed on e-commerce by Amazon and on Walmart subsidiary Flipkart and on data housing by Visa and Mastercard. "Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion", the trade representative's office added. "Moving GSP imports from the docks to USA consumers, farmers, and manufacturers supports tens of thousands of jobs in the United States", added the USTR office. As many as 5,111 Indian products, ranging from textiles to engineering goods, are covered under GSP, of which India was using only 2,167 tariff lines.

India, however, "has implemented a wide array of trade barriers that create serious negative effects on United States commerce", the statement said.


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