Note on GSP

Generalized System of Preferences (GSP)


Generalized System of Preferences (GSP) is a preferential tariff system extended by developed countries (also known as preference giving countries or donor countries) to developing countries (also known as preference receiving countries or beneficiary countries). It involves reduced MFN Tariffs or duty-free entry of eligible products exported by beneficiary countries to the markets of donor countries.

In simple words, GSP means Generalized System of Preferences, which is a preferential tariff system provided by group of developed countries to developing or least developed countries.

The nations which receives the benefit of GSP known as beneficiary countries and those countries who provide this GSP benefit to beneficiary countries is known as donor countries.

So the GSP system enables beneficiary countries to benefit from reduced or zero tariff rates when exporting permitted products to GSP donor countries.

The main objective behind GSP is;

  • to increase their export earnings of developing or least developed countries
  • to promote their industrialization, and
  • to accelerate their rates of economic growth.


The least developed countries (LDCs) receive special and preferential treatment for a broader coverage of products and deeper tariff cuts.

Exporters must check whether their nations are listed under the GSP scheme of the importing country before they are starting to export operations and furthermore should ensure that their products are covered under the GSP scheme of the importing country before starting export procedures.


In India, Generalized System of Preference, that is issued by Export Inspection Agency. Export Inspection Agency has offices in all major cities to serve exporters in maintaining best quality to meet the specification of buyer to have best quality management system for exporters.


GSP is presently extended by 29 developed countries. The list of Donor Countries as follows,




Czech Republic

European Union*


New Zealand


Republic of Belarus

Republic of Bulgaria

Republic of Hungary

Republic of Poland

Russian Federation



United States of America


*In EU Member States,















United Kingdom



It came to know that Kazakhstan, Kyrgyzstan, Lithuania and Ukraine may also be allowing preferential tariff treatment to select Indian goods.



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