New Delhi, May 20 (Mayank Nigam) Engineering goods exports to key markets of the US and China fell sharply in April, 2023 while shipments to Russia surged more than 11 times during the period, engineering exports promotion body EEPC India said on Saturday. Out of 25 top destinations for Indian engineering goods, as many as 15 saw positive year-on-year growth during the month under review while 10 countries witnessed negative growth. The top 25 countries including US, Germany, UK, France, Indonesia, Singapore contribute about 76% of total engineering exports from India. The value of engineering exports to the US was US$ 1.4 billion in April 2023, down 24.9% compared to US$ 1.86 billion in April 2022. Shipments to China continued the declining trend and fell 15.5% year-on-year to US$ 183.3 million in April 2023 as compared to US$ 216.9 million in the same month last year.
On the other hand, engineering exports to Russia surged more than 11 times growing from US$ 11.7 million in April 2022 to US$ 133.6 million in April 2023. Exports to Oman also more than doubled in April 2023 to US$ 153.9 million from US$ 65.9 million in April 2022. Engineering exports from India continued to decline in 2023-24 as April 2023 saw 7.15% drop in shipment over April 2022. It was recorded at US$ 8.99 billion in April 2023 as against US$ 9.68 billion in April 2022. Drop in shipment to North America, EU and ASEAN region led the decline in overall engineering exports. Commenting on the latest export data, EEPC India Chairman Arun Kumar Garodia said that the decline in exports have been majorly fueled by declining demand in almost all regions barring Latin America, WANA, parts of Europe and Oceania. “Significant export decline was noted in North America mainly due to the US where India’s engineering exports fell by around 25%.
It is worth mentioning here that US is currently going through a banking crisis and a debt ceiling crisis. Its imports have come down in the last few months. In March 2023, USA’s overall global import fell down by more than 9% compared to March 2022. Exports to the EU have been impacted by the double whammy – the ongoing Ukraine-Russia crisis and the withdrawal of the GSP benefits,” he said. He noted that the situation might be worsened once the EU implements the protective Carbon Tax. “In South Asia too situations remain grim as Bangladesh’s economy suffers from the lowering global demand and Nepal and Sri Lanka reel under the debt crisis,” he added. According to the Quick Estimates of Department of Commerce, Government of India, share of engineering exports in India’s total merchandise exports during April 2023 was 24.38% as against a higher 25.92% in April 2022. Panel-wise analysis showed that out of 34 engineering panels, 16 recorded decline in exports during April 2023. Iron and Steel was the main spoilsport behind the decline in engineering exports among all the panels with 25.5% decline in exports in April 2023 over April 2022. Excluding the export of iron and steel, engineering exports recorded 2.99% year-on-year decline in April 2023, according to EEPC India.
Engineering products that witnessed positive growth include copper and products, industrial boilers, IC engines, pumps and valves, air condition machinery, auto parts, electrical machinery, other construction machinery, etc. Major engineering products that witnessed negative growth include iron and steel, products of iron and steel, non-ferrous metals like aluminium, zinc, nickel, lead, tin and other products, industrial machinery for dairy, two & three wheelers, auto tyres, hand tools and bicycle parts. Amid declining trend in engineering exports, the decline in North East Asia has come down significantly – exports to both Japan and Korea increased and export decline in China came down from more than 50% to 15%. Both WANA and Oceania have shown significant promise as alternative export destinations. “FTAs with both UAE and Australia have yielded some positive results. Latin America is another region where there is significant potential. We may look into some comprehensive FTAs in this region to strengthen our presence,” said EEPC India chief. While appreciating the support provided by it on a continuous basis, Garodia requested the government to look into the export incentive structure so that exporters are able to fully utilize the schemes and remain competitive in the global market.