Generalised System of Preferences

• India and Indonesia were the top two beneficiaries of the European Union’s Generalised System of Preferences (GSP) schemes for exports in 2022.
• Clothing, machinery, and footwear accounted for nearly half of all standard GSP imports, as per a joint report of the EU to the European Parliament and the Council.

About GSP scheme

• Under the GSP scheme, the EU allows identified products originating in certain developing countries preferential access to its markets in the form of reduced or zero rates of customs duties.
• As the items become more competitive and reach a particular threshold, the GSP is withdrawn.
  • The EU has already withdrawn the GSP benefit from about 1,800 items from India in 2023, and the present policy will now continue for another four years until 2027.
  • The items include electrical machinery, plastics, articles of stone and articles of leather and could affect exports worth $7.9 billion.
• GSP was instituted under the aegis of United Nations Conference on Trade and Development (UNCTAD).