Donald Trump to end preferential trade treatment for India on June 5

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"This will remain the guiding factor in the Government's approach", a statement released by the Ministry of Commerce & Industry said.

The Indian Government responded, stating that despite Washington's move the country would " continue to build on our strong ties with the USA, both economic and people-to-people".

"The Trump administration had launched an eligibility review of India's compliance with the GSP market access criterion in April 2018".

US President Donald Trump's decision on Friday to terminate benefits accruing to Indian exporters under the Generalized System of Preferences (GSP) scheme from 5 June must propel New Delhi to face the headwinds in the global trading system by pursuing robust trade policies to maximize its dollar-and-cent gains, according to analysts.

In a proclamation, Mr Trump said: "I have determined that India has not assured the USA that it will provide equitable and reasonable access to its markets".

The programme India is being expelled from, called the Generalised System of Preferences, was devised to allow developing countries to alleviate poverty through trade.

"India, as part of our bilateral trade discussions, had offered resolution on significant United States requests in an effort to find a mutually acceptable way forward", the ministry statement said. "Accordingly, it is appropriate to terminate India's designation as a beneficiary developing country effective June 5, 2019", Trump said in a proclamation on Friday ignoring the plea made by several top American lawmakers.

The end to GSP comes ahead of the meeting between Trump and Prime Minister Narendra Modi in Japan later this month during the G20 Summit.

First decision dedicated to those who protect India: PM Modi
Newly-elected NDA leaders are likely to meet today, a day after the distribution of portfolios to the 57-member Council of Ministers.

After imposing unilateral trade measures separately on China and Mexico during the past seven days, President Trump opened another front targeting India this time.

President Trump had conveyed his intention to terminate India's eligibility for the programme to the U.S. congress on March 4.

The impending American termination was previewed on Thursday by a senior administration official, who described it as a "done deal" and said it was time for the two countries to move on, and try to resolve other trade irritants.

But trade tensions with India have been quietly simmering after the country rebuffed United States efforts to open Indian markets to U.S. dairy products, medical devices and other goods.

India has benefitted from a scheme that has seen up to $5.6billion worth of goods enter the USA duty-free, but this will end next week on June 5. However, this was only a small piece of India's overall exports to the United States in the same period, which stood at $51.4 billion.

But the administration held off on the proclamation as India was in the middle of elections and there was pressure from USA lawmakers, from both parties, to delay the termination to allow more time for negotiations.

The US' demand for relaxation in norms for exports of medical devices and dairy products are non-negotiable for India.