There is a possibility of a trade war between India and the US. This led to the sensitivity of the stock market for the last three days. Foreign investors are making extraordinary withdrawals. Actually, the fear of trade war between the two countries started only after the withdrawal of the preferential national status given to the developing countries of America. India is also included in those countries. Removing GSP from its preferential status will have to pay huge taxes on tax free items to be exported from India. This will increase burden on Indian producers. After the US decision, the Indian government also increased customs duty on twenty-eight items like walnuts, almonds and pulses coming to the US from India. The action taken in response to this decision of India is being explained. The decision of the US has increased the duty on Indian Aluminum, Steel etc. products, which have led to difficulties in the companies working in these sectors. The shares of companies working in these sectors have seen a decline.
To handle the economy, the nations sometimes decide to end the exemptions given in the border. That’s why America’s decision is not new. The US economy is going through a delicate period. Donald Trump promised to provide employment to American youth and strengthen the economy in his election campaign. For the sake of creating new jobs and for security reasons, he had tightened the rules about reaching the US for citizens’ jobs in many countries in the early days of his tenure. Now they end the tax exemption on items coming from countries included in the list of preferential nations to handle the economy. This will increase the revenues of the US and the markets will grow for the goods there. But when big countries give some countries the status of preferential nationality, the purpose behind them is to help those nations improve their economy and strengthen business relations. In this way, the US made India out of GSP, it was believed that it did not want to keep its relations with India as sweet as before. Therefore, India’s decision can not be considered unknowable that it also abolished the exemption given on some items imported from the United States.
Indeed, India is a fast growing economy, but the reality is that it is not in a strong position. The growth rate is downwards. In such a situation, the rhetoric of the government is being seen on the forehead. To overcome this, the government has constituted two committees who will consider measures to accelerate the growth rate and create new employment opportunities. In the meeting of the Governing Council of the Policy Commission, the Prime Minister stressed the efforts of Chief Ministers of all the states to work on shoulder work and efforts towards increasing exports. In the next five years, the government has expressed the intention to move the economy to five thousand billion dollars. Therefore, the decision to withdraw tax discounts on American goods can not be called inappropriate. The fear of stock market should not be considered too serious.