Under the new GSP treatment, agricultural products are excluded and in the non-agricultural sector, GSP benefits for only leather have been reinstated.
As per the regulation, which formally entered into force on January 1, 2026, and will remain in effect till December 31, 2028, specific tariff preferences have been suspended for certain GSP beneficiary countries, including India.
In 2023, EU imports from India amounted to approximately €62.2 billion. Of this, only €12.9 billion was eligible under the EU’s Standard GSP framework. India has graduated from 12 major product categories. As per new Regulation, €1.66billion of trade is expected to graduate out of GSP regime leaving the eligible GSP trade to be €11.24 billion as per 2023 data.
“In other words, the new regulation impacts only 2.66% of India’s exports to EU,” the ministry said.
Graduation process is based on competitiveness of country’s exports which is periodically reviewed by EU.
“India’s graduation over time is on account of increasing competitiveness of its exports,” it added.There are three tiers under the EU GSP- Standard GSP for low and lower‐middle income developing countries that meet certain conditions. India gets the benefit under standard GSP.
The second is GSP plus which is an enhanced incentive scheme; countries must ratify and implement a set of international conventions on labour, human rights, environment, governance. The third is Everything But Arms (EBA) wherein least developed countries get duty-free, quota-free access for all goods except arms.
“Under the new GSP treatment, agricultural lines are not graduated. In the non-agricultural sector, only leather has been reinstated,” the ministry said.
The suspension covers thirteen specific GSP sections such as mineral products, chemicals, plastics, textiles, pearls and precious metals, certain metals, machinery and transport equipment.
“While it has been reported that approximately 87% of India’s export value to the EU falls under the broad product categories mentioned in the EU notification, it is important to note that this does not imply that 87% of Indian exports will face higher duties,” the Federation of Indian Export Organisations (FIEO) clarified, adding that no additional products have been newly brought under GSP withdrawal through this extension.
It explained that the EU notification refers to broad product groupings, within which several products already attract zero customs duty under the EU’s Most Favoured Nation regime, and therefore remain unaffected by the withdrawal of GSP preferences.
“Many specific tariff lines within these broad categories continue to be eligible for EU GSP benefits, subject to applicable rules of origin and conditions,” it said.
FIEO said that the practical impact of the notification on Indian exports is limited, and exporters are advised to assess their position at the tariff-line (HS code) level, rather than at the level of broad product categories.
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