India to benefit as EU extends preferential duty regime
Tuesday, 29 July 2008, 19:30 IST
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Brussels: Merchandise exports from India and 175 other developing countries under a preferential duty regime stand to benefit longer, with the European Union extending the popular scheme by two years. The EU adopted a new regulation to apply the Generalised System of Preferences (GSP) regime for another two years beginning Jan 1, 2009 to provide some real economic benefit to 176 countries, an official statement said. India is the largest beneficiary of the EU's GSP scheme. "Continuation of GSP will ensure stability and predictability for beneficiaries and traders in the EU and developing countries. GSP is a vital tool of our pro-development EU trade policy," Trade Commissioner Peter Mandelson said. India's preferential imports entering the EU under the GSP reached 11.3 billion euros in 2007, compared to 9.6 billion euros the year before. The sector to benefit the most will be gems and jewellery, with such exports to EU, comprising jewellery, pearls, precious and semi-precious stones and metals, estimated at 2.1 billion euros. Under the GSP system, EU imported goods worth 57 billion euros in 2007 at a nominal duty loss of 2.5 billion euros. The EU resolution also called for the re-calculation of preferences for six countries, including India, to reflect their evolution in trade. The other countries are Algeria, Indonesia, Russia, South Africa and Thailand. The benefits to India's gems and jewellery industry will be extended under this re-calculation. "This procedure follows strict rules, and helps to ensure that the benefits of GSP preferences are targeted at the countries that need them most," the EU statement said. "Suspension of preferences called 'graduation' reflects the fact that a particular country is competitive in the EU market for the products in question." The preferences lapse at the end of this year and both existing and potential new beneficiaries meeting the criteria will need to apply before Oct 31 if they wish to receive the treatment from January 2009.
Source: IANS
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