Expressing concern over the plan to terminate India's generalised system of preferences (GSP) status, 25 US trade associations have sent a letter to the US Trade Representative (USTR) urging it to extend talks to reach a mutually agreeable solution.
They fear the step in the middle of the Indian elections will not achieve its intended goal of applying pressure for reform.
The associations include the American Apparel and Footwear Association (AAFA), the American Association of Exporters and Importers (AAEI), the American Association of Port Authorities (AAPA), the Association of Food Industries, the Coalition for GSP, the Coalition of New England Companies for Trade and the Council of Fashion Designers of America (CFDA).
The step is likely to exacerbate political differences over trade issues, trigger retaliatory actions by New Delhi and undermine the business climate for US companies trading with and engaged in business in India, the letter said.
The action will have an adverse impact on many US workers who now depend on global value chains that use imports from India, according to a press release from AAFA.
The step also seems to disregard the way in which this program helps lift hundreds of millions of people out of extreme poverty, as has been witnessed since its inception in 1974.
The letter requested that any final revocation or suspension be deferred for at least 60 days to allow the new Indian Government to appoint officials to engage in bilateral negotiations.