India said on Tuesday termination of generalised system of preferences by the US on jewellery and brass lamps will lead to job loss in the Indian labour intensive sectors, which enjoyed duty-free access in American market.
"The decision is likely to lead to a number of jobs being lost in the jewellery sector in India, specially among vulnerable groups of society," Commerce and Industry Minister Kamal Nath said in a statement.
The US administration has decided not to renew the Competitive Needs Limitation Waiver for gold jewellery and brass lamps from India, thereby ending the GSP preference.
GSP is a unilateral programme of the US government and is not a result of negotiations with GSP beneficiaries. Hence, it
is upto the US government to decide on how it wishes to administer the programme, Nath said.
The withdrawl of GSP would mean that exporters of gold jewellery from India would have to pay four per cent duty. The move will impact close to $1.8 billion of jewellery exports to US, which account for one-third of the total shipment of $5.21 billion.
The decision, which came within a week of failure of WTO talks among the four key players in Potsdam in Germany, would also affect exports of brass lamps, hitting the handicraft sector struggling under the impact of hike in rupee value. Brazil, championing the cause of developing countries along with India, was also hit by the withdrawal of GSP benefits on brake, brake parts and ferrozirconium.
