'GSP withdrawal:No impact on exports to US yet,up 8.5% in Jun'

Termination of generalised system of preferences (GSP) by the US early June has not made an "overly negative impact" on engineering exports to the world's largest economy so far, though the real impact will be clear only in the next few months, the EEPC said Tuesday. The GSP is a US trade programme designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 4,800 products from 129 designated beneficiary countries and territories.

The US government on June 5 announced termination of the GSP facility for the country effective immediately. EEPC chairman Ravi Sehgal said exports to the US went up to USD 990.5 million in June from USD 913 million in the same month in 2018, registering a growth of 8.5 percent.

"The GSP termination from June 5 does not seem to have an overly negative impact on our exports, at least in June. This can be because exports have already been contracted out and the margins lost may have been shared by both exporters and importers. We will need to monitor the trend in the next few months," the EEPC said in a statement.

"Unlike most global markets, engineering exports to the US remained in the positive territory both for June and the first quarter of the current fiscal," it added. "However, we have got to be watchful whether and how the GSP withdrawal is panning out," he added.

For the cumulative three-month period of the current fiscal, shipments of engineering goods to the US rose to USD 2.92 billion, a growth of 5.2 percent a year ago. However, contrary to this, overall engineering exports in June fell 2.31 percent to USD 6.36 billion, it said.

It further said, the US reminded to top exporting destination for the country's engineering products in June 2019, logging a marginal growth. However shipments to the European Union fell over 17 percent in June to USD 1.14 billion. For the June quarter, drop was 9.2 percent to USD 3.85 billion. "Several restrictions in the EU markets which are kind of tariff and non-tariff barriers have impacted our exports to the EU," EEPC said.

On the exchange rate, the rupee lost 2.43 percent in June..