UK to withdraw duty benefit scheme GSP from June 19

The United Kingdom has decided to withdraw the duty benefit scheme, the Generalised Scheme of Preferences (GSP), which may impact India’s labour-intensive goods exporters.

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India’s exports from certain labour-intensive sectors may be affected, as the United Kingdom (UK) decides to withdraw the duty benefit scheme Generalised Scheme of Preferences (GSP). From June 19, the UK is replacing GSP with a new scheme called Developing Countries Trading Scheme (DCTS).

Labour-intensive sectors, likely to be impacted by the withdrawal of the duty benefit schemes include leather goods, carpets, iron & steel goods, chemicals and certain textile items.

India’s exports worth US$ 2.5 billion are entitled to the GSP benefit in the United Kingdom (UK). Mr. Ajay Srivastava, Co-founder Global Trade Research Initiative (GTRI) said, “As the UK has come out of the EU, it has designed its own GSP scheme. Each country sets a product-wise threshold limit, if a country’s exports cross the limit, the GSP concessions stop. The UK withdrawing GSP concessions on labour-intensive products was expected as the two countries are negotiating a free trade agreement.” 

He informed me that certain sectors such as metals would continue to enjoy the duty benefits.

He said, “India will get the benefits under standard preferences rather than enhanced preferences. LDCs will get enhanced benefits.”

While expressing his opinion he said, as the concessions are small, India should stop participating in the GSP schemes. According to him, India should stand tall like China. He further said, ‘GSPs are vestiges of the colonial mindset and should be used by only Least Developed Countries (LDCs).’