India could lose a vital U.S. trade concession, under which it enjoys zero tariffs on $5.6 billion of exports to the United States, amid a growing dispute over its trade and investment policies, people with close knowledge of the matter told Reuters.

According to Reuters, a move to withdraw the Generalised System of Preferences (GSP) from India, the world’s largest beneficiary of a scheme that has been in force since the 1970s, would be the strongest punitive action since President Donald Trump took office in 2017 vowing to reduce the U.S. deficit with large economies.

Trump has repeatedly called out India for its high tariffs.

The trigger for the latest downturn in trade ties of both countries was India’s new rules on e-commerce that restrict the way Amazon.com Inc. (AMZN) and Walmart-backed Flipkart do business in a fast-growing online market set to reach $200 billion by 2027. 

That, coming on top of a drive to force global card payments companies such as Mastercard and Visa to move their data to India and the imposition of higher tariffs on electronic products and smartphones, left a broader trade package the two sides were working on through last year in tatters.