Economy

Engineering exports may dip $5 b this fiscal on growing protectionism: EEPC

Abhishek Law Kolkata | Updated on November 28, 2018 Published on November 28, 2018

Ravi Sehgal, EEPC Chairman, speaking at an event in Kolkata on Wednesday   -  Debasish Bhaduri

Ambiguity over US’ extension of GSP to Indian exporters may result in loss of orders

Engineering exports are expected to dip by $5 billion in the current fiscal following increased protectionist measures by the US and Europe. The ambiguity over extension of the Generalized System of Preferences (GSP) to Indian exporters could also result in loss of export orders, EEPC India Chairman, Ravi Sehgal, said.

“Against a target of $90 billion for FY19, we may end the year with lower exports, say around $85 billion. This drop will primarily be on account of the protectionist measures that the US and Europe are taking,” Sehgal said on the sidelines of an event here.

Engineering exports stood at $76.2 billion last fiscal.

According to Sehgal, measures by the US, including an increase in import duty on steel and aluminium products, have already had an adverse impact on exports.

Import tariff

The Trump administration, it may be recalled, raised import tariffs on these items and challenged India’s export subsidy regime at the WTO. India has also dragged the US to the WTO and threatened to impose retaliatory tariffs.

Previously, duty on steel imports from India was in the range of 0-6 per cent. Post revision, the duty (across different imports) stands at 30 per cent, exporters told BusinessLine.

Other markets like Europe, which exporters were looking at for increased shipments — too imposed anti-dumping duties on different products like steel tubing and piping. While EEPC is contesting the anti-dumping cases, there has been “lesser than expected purchases” from European companies, Sehgal said. Some have “held back” on orders awaiting resolution of these anti-dumping cases.

GSP issue

Sehgal expressed apprehension over the possible withdrawal of GSP benefits for exporters.

As ambiguity persists, smaller exporters have been worst hit and may lose out on orders to companies in Vietnam or Cambodia.

The US had, earlier this month, revoked duty free concessions on at least 50 Indian products, mostly from the handloom and agricultural sectors. The Federal Register issued a notification listing out 90 products which were so far duty-free under GSP. Created in 1974, the programme (GSP) provides duty-free entry into the US market for over 3,400 exports from designated beneficiary developing countries and about 1,500 additional exports from least-developed beneficiary countries.

“At least 1-2 per cent of the orders will be affected with this ambiguity over GSP benefits. Other countries like Vietnam will benefit. We have taken up the matter with the Commerce Ministry,” he said.

Published on November 28, 2018
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