Is the GSP Scheme of the EU benefiting India’s Exports?

A review of the implementation of the European Union scheme of preferential tariffs for developing countries under the Generalised System of Preferences during the past forty years shows that the scheme has made at best a modest contribution towards increasing the export earnings of India and other beneficiary countries covered by the standard GSP. The benefits for these countries have been constrained by the shallow cuts in tariffs for important products and the practice of product/sector graduation. The policy of differentiation among beneficiaries, which is a central pillar of the EU scheme, has resulted in deeper and wider preferences for GSP + countries and LDCs and limited the benefits for other developing countries.