The Trump administration argues that New Delhi has failed to assure America that it will provide equitable and reasonable access to its markets in numerous sectors.
The presidential proclamation, however, did not reveal/ suggest the areas in which India had denied market access.
GSP is the largest and oldest USA trade preference programme.
"India, like the United States and other nations shall always uphold its national interest in these matters", the government said in a statement issued through the trade ministry. USA authorities said their country's trade deficit with India reached $27.3 billion in 2017. The statement said we have significant development imperatives and concerns and our people also aspire for better standards of living. "This will remain the guiding factor in the government's approach", said the Ministry of Commerce in response to the Trump administration's decision.
The Generalized System of Preference (GSP) is the largest and oldest United States trade preference program and is created to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.
Meanwhile reacting to President Trump's decision, India Saturday said it will continue to work with the USA to strengthen economic ties in the wake of America's decision to withdraw export benefits under the GSP programme.
It said that the GSP benefits given by developed countries like the USA to developing nations such as India are "unilateral, non reciprocal and non discriminatory".
The two nations have been in a battle for months over trade agreements.
But President Trump is never bothered with multilaterally- agreed trade rules.
Kundal countered that it was not an issue of market access but of "certification given the religious, cultural and moral sensitivities" and India provide unimpeded market access to dairy products from all countries that met the criteria.
More than the market access concessions in India, the U.S. does not want India to strengthen its farm and other sectors, especially the digital sector.
U.S. technology companies have complained about measures India uses to protect its internet industry. It remains opposed to domestic generic industry-initiatives even though they offered medicines at affordable prices for a range of new diseases.
"Only a year after the Senate and House passed a three year reauthorisation of the GSP by a near unanimous margin, the Trump administration has kicked out the GSP country that saves American companies more money than any other", he said.
Mr Trump has also imposed tariffs on steel and aluminium imports from countries around the world. U.S. firms have opposed such legislation in various parts of the world.
India, which came under the GSP programme in 1975, is its largest beneficiary in the US.
Separately, the U.S. is involved in an escalating trade war with China, and recently threatened tariffs on Mexican goods over illegal migration.