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The Southern India Mills’ Association

Committed to Foster the Growth of the Textile Industry

Firm seeks restoration of duty free benefits in U.S.

U.S. reviewing India’s eligibility; panel hearing on June 19
Chennai-based TCP Ltd, which produces inorganic chemicals, has called for the restoration of Generalised System of Preferences (GSP) benefits, which enables duty-free access to the U.S. market.
Nearly 3,500 Indian products from sectors such as chemicals and engineering get duty-free access to the U.S. market under the GSP, introduced in 1976.
The U.S. is reviewing India’s eligibility under GSP and its sub-committee would hold a hearing on June 19 on the issue.
In its comments submitted to the sub-committee, TCP said that its products had applications in a wide spectrum of industries including textile, pharma, paper and ceramic.
TCP said its flagship product — sodium hydrosulphite, also known as sodium dithionite — is predominantly used in the textile industry as a reducing agent in the processing of fabrics and in paper industry as a bleaching agent. The firm said it is exporting the product to various countries, including the U.S., which continues to be its top three export destinations. In the financial year 2017-18, it shipped 35 TEUS (20 feet containers) worth $6,507,70 on free on board basis, when compared to 31 containers in the previous financial year. Royce Associates is its sole importer.
“Our major competitor in the overseas market is China, where there are too many producers with huge production capacity. Due to economy of scale advantage, cheap labour and government support, their production cost is significantly lower than ours so they are in an advantageous position to export this product at considerably lower price,” TCP said.
Until last year, we were competitive in the U.S. market thanks to the GSP benefit by which export from India enjoyed NIL duty versus 5% (presumed) for export from China, it added.
Competition from China
TCP said post suspension of GSP benefit last year, it lost its cost advantage and consequently is facing more competition from China. “There is a substantial price disparity between the Indian and Chinese product which encourages importers in the U.S. to choose Chinese products over ours. Since last year, especially after the withdrawal of the GSP Scheme, we lost substantial business in the U.S.,” it added.
India and the U.S. have a very strong, longstanding and cordial trade relationship and we expect the U.S. government to support more Indian products in the U.S. market, TCP said.
TCP is among the 60 small and medium businesses that have submitted their comments to the GSP sub-committee seeking continuation of GSP benefits.
The Indian government has also requested the U.S. to maintain the GSP beneficiary status.