Second Covid wave fails to dent India's engineering exports

Analysis of the official trade data shows that all the product groups other than 'ships, boats and floating structures' recorded positive growth in April this year, writes Krishnanand Tripathi.

New Delhi: India's engineering goods exports, which includes machinery, industrial goods, automobiles and auto components, among other things, recorded positive growth to the majority of key markets, including the US, China, Germany and Italy in the month of April, showed an analysis of the official trade data.

Among the top 25 export destinations for Indian engineering goods, negative growth was seen only in the case of Malaysia and Singapore and an overwhelming majority, 23 of top 25 markets, registered growth in shipments from India.

The world's largest economy, the USA continued to be the biggest market for Indian engineering goods followed by China, which is the second largest economy.

While exports to the US jumped more than 400% year-on-year in April, the shipments to India’s second largest export destination China also registered an impressive growth of over 143% in the month.

"All the product groups other than 'ships, boats and floating structures' recorded positive growth during this period. The growth momentum has continued for the past few months despite Covid shadow," said, Mahesh Desai, Chairman of Engineering Export Promotion Council of India.

Desai said the high growth rate in outbound shipment is mainly due to the low base of FY 2020-21.

"But the recovery is indeed impressive. It mirrors global trends," he told ETV Bharat.

Among the 32 engineering goods categories, which posted positive growth, exports of iron and steel recorded a massive jump of 210% in April 2021 compared to the same month last year.

Non-ferrous segment as a whole comprising aluminium, zinc, nickel, lead, tin and other products witnessed 110.5% growth in exports during this period.

Within industrial machinery segment, overall there has been growth in monthly exports to the extent of 703%, from $146.21 million in April 2020 to $1,174.23 million in April 2021.

Exports of the electrical machinery segment increased from $245.43 million in April 2020 to $853.1 million in April 2021 witnessing a growth of more than 247% unlike the pattern observed in the previous months.

Exports of aircraft, spacecraft and parts exhibited positive monthly growth by more than 200% in April 2021 scaling up from $24.1 million in April 2020 to $74.5 million in April 2021.

Exports of ships, boats and floating structures was the only engineering segment which registered negative growth to the extent of 32.8%, from $677.4 million in April 2020 to $455.4 million in April 2021.

As per the data compiled by the council, engineering goods exports in April jumped by 230% in value terms, from $2.31 billion to $7.60 billion, year-on-year basis.

Engineering goods account for about one-fourth of the total merchandise exports from the country and significantly contributed to the recovery in the country's external trade.

Total merchandise exports in April 2021 were $30.63 billion as compared to $10.36 billion in April 2020, an increase of 200%.

As compared to April 2019, exports in April 2021 showed a growth of 17.62% suggesting robust outlook for the sector.

However, it registered a sharp decline in April last year due to the world's most stringent lockdown imposed by Prime Minister Narendra Modi to control the community transmission of the deadly coronavirus.

But with the unlocking and reopening of economic activity last year, the country's exports also picked up the pace which is in line with the global trend.

Given the upward trend, the government hopes the merchandise exports will reach $400 billion in the current financial year.

Though trade experts remained optimistic about the country's trade potential, however, a devastating second Covid wave, which registered average 4,00,000 daily cases and over 4,000 deaths in recent times forcing the states to impose curfew and statewise lockdowns, threatens to derail the economic activity, including the country's global trade.

"State governments are doing their best to ensure that economic activities are not impacted as a result of lockdowns but trade and business have not been completely insulated. It is therefore important that exporters get adequate support from the government," said EEPC Chairman Mahesh Desai.