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India Exporters Fear Loss of American Business After US Scraps Trade
Privileges

Anjana Pasricha

   FARIDABAD, INDIA - Since starting out with exports of leather gloves
   over three decades ago, business has boomed at Alpine Apparels, a
   leather goods factory on New Delhi's outskirts. Sanjay Leekha's
   family-owned business has diversified into accessories such as
   handbags, belts and jackets, with some designs being inspired by Indian
   craft.
   But Leekha fears that business could be hit after the U.S. scrapped
   concessional tariffs for these products, as American buyers will want
   him to compensate for the higher duties.

   "It is not easy because the margins have never really been built in to
   handle an additional 4 to 10 percent reduction in cost," he said. He
   worries that business could shift to other countries "in case we are
   unable to make the price reductions and the customers are not able to
   absorb the increased cost."
   The trade row between India and the U.S. has heated up since June, when
   Washington ended trade privileges that allowed over $6 billion of
   Indian imports to enter with lower or zero duties under a program known
   as the Generalized System of Preferences (GSP). India was the biggest
   beneficiary of the trading agreement that was meant to help more than
   120 developing countries grow their economies.
   New Delhi retaliated by raising tariffs on 28 American items, such as
   apples, almonds and walnuts.

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