Context:

  • India and the US are set to discuss number of important trade issues at the trade policy forum meet that begins today (January 12).
  • These issues include from New Delhi’s long-pending demand seeking the restoration of Generalised System of Preferences (GSP).

Background:

  • India had lost GSP benefits in 2019 when former US President Trump began introducing radical trade measures after citing widening trade gap with India and China.
  • Trump’s trade war was detrimental to New Delhi as it was the largest beneficiary of GSP status in 2017 with nearly $5.7 billion worth of imports into the US given duty-free status.

What is the totalisation agreement that India is seeking?

  • India is also set to discuss its longstanding demand for a totalisation agreement that will provide social security to Indian professionals in the US.
  • A totalisation agreement or social security agreement will eliminate dual social security deductions in India and also in the US.
  • The agreement will particularly benefit the Indian IT sector workforce who are working in the US and paying social security but are unfortunately unable to get the benefit.

About GSP:

  • The Generalized System of Preferences (GSP) scheme is a voluntary trade measure which is implemented by developed countries that provide an advantageous, or “preferential”, tariff treatment to imports from developing countries.
  • Different national GSP schemes were introduced after a resolution adopted at the second session of the United Nations Conference on Trade and Development (UNCTAD) in 1968.
  • The scheme is expected to contribute to developing countries’ export growth especially in the manufacturing sector.