India to lose preferential trade terms with the U.S. under the Generalized System of Preferences program

The suspension of a U.S. trade preference program with India is a "done deal," a senior State Department official said on Thursday as Prime Minister Narendra Modi started his second term.

President Donald Trump declared in March he would end India's access to the decades-old Generalized System of Preferences (GSP) trade program over what the U.S. said was due to lack of access to India's market. The program enables emerging countries to send out products to the United States without paying duties.

U.S. law requires the administration to hold up 60 days after it notifies Congress of the move before it formally closes India's cooperation in the program. Trump told Congress of the move toward the beginning of March.

"There is every reason to believe that GSP suspension will push ahead," the official told columnists, talking on condition of secrecy. "What is significant is that the interest to determine trade aggravations - to guarantee reasonable and fair market access," the official included.

Be that as it may, the official said the advantages could be re-established if India gave U.S. companies reasonable and even-handed access to its markets.

"We should look forward at how we relaunch an ambitious set of exchanges between our trade groups so as to address these outstanding irritants," the official said.

"We believe if India is set up to address policies, including information localization, e-commerce business estimates that served to smother international investment for top-level companies, this can help to continue on gaining progress moving forward between the two nations," the official included.

India is the world's biggest beneficiary of GSP, which dates from the 1970s, and completion its participation would not exclusively be the most punitive action against the nation since Trump took office, yet would likewise open another front in the global trade war.

Twenty-four U.S. members of Congress sent the administration a letter on May 3 urging it not to end India's involvement to the GSP.