The Commerce Ministry stated that the European Union’s suspension of the Generalised Scheme of Preferences (GSP) will impact only 2.66% of India’s exports to the EU. In 2023, EU imports from India totaled around 62.2 billion euros, with only 12.9 billion euros eligible under the EU’s Standard GSP framework. This change will result in 1.66 billion euros of trade moving out of the GSP regime, leaving eligible GSP trade at 11.24 billion euros based on 2023 data.
The graduation process is determined by the competitiveness of India’s exports, which is periodically evaluated by the EU. India’s graduation from certain product categories is attributed to the growing competitiveness of its exports. The European Commission has implemented Regulation (EU) 2025/1909, which suspends specific tariff preferences for certain GSP beneficiary countries, including India, from 2026 to 2028.
Under the new GSP treatment, agricultural lines remain unaffected, while only leather has been reinstated in the non-agricultural sector. The suspension covers thirteen specific GSP sections, including mineral products, chemicals, plastics, textiles, machinery, and more. The EU’s GSP is a unilateral trade preference scheme that grants reduced or zero customs duties to imports from developing countries.
