New Delhi: Despite the global supply chain disruptions caused by Delta variant, India's engineering export, the biggest component in the country’s export basket, has achieved almost half of the yearly target in the first six months of the current financial year, according to the latest trade data.
In September, total engineering goods shipment crossed the mark of $9 billion as 27 out of total 33 categories of engineering goods export recorded growth in the month in comparison with the exports during the same month last year.
However, six of total 33 engineering goods categories such as zinc, aircraft, spacecraft and parts, ships and floating structure and electrical machinery among others recorded negative growth during the month.
The share of engineering goods in the country’s total merchandise export in the month was at around 27% as September is the third straight month when engineering exports were more than $9 billion.
In yet another sign of India's strength in the export market, 22 out of top 25 export destinations such as China, UAE and the UK recorded positive growth in shipments to them.
"India's engineering exports have cumulatively increased from $ 32.4 billion in April-September 2020-21 to $52.3 billion in April-September this year,” said Mahesh Desai, Chairman of Engineering Exports Promotion Council of India (EEPC).
Desai said engineering exports registered a growth of over 61% during the first six months of the current financial year. “It means we are well on track to achieve our target of $105 billion in FY22. In the first six months, almost 49% of the target has been achieved so we are almost halfway mark," Desai told ETV Bharat.
India has set a target to achieve export of goods and services worth $400 billion this year.
Despite the strong growth in engineering goods in the first six months, the growth is likely to slow down in the next two months, particularly on account of India’s festival season in October and November, and also due to year-end holidays in western countries.
US biggest market
An analysis of trade data shows that during the month of September, the US remained the top destination for engineering goods exports with the total value of the shipment at $ 1.29 billion, an increase of over 12% in shipments to the US in comparison with engineering exports during the same month last year.
Asia's largest economy China was the second biggest market with total shipments growing 49% year-on-year to $568 million during this period.
Similarly, India’s engineering goods exports to UAE grew by 48% to $399.6 million in September 2021 as against $268.6 million during the same month last year.
In addition to these three markets, India’s engineering exports to other advanced and emerging economies such as Germany, Italy, UK, Singapore, Vietnam, Mexico and Turkey also recorded positive growth in September.
According to the trade body, the rapid pace of recovery, decline in Covid cases, pent-up demand and policy measures taken by the government supported the engineering goods export during this period.
Iron, steel and industrial machinery growth
Iron and steel, aluminum and products made from them, industrial machinery, automobiles and auto-components registered a record growth in September.
The export of iron and steel exports jumped by 136% in September this year in comparison with their export during the same month last year.
Industrial machinery comprising boilers, internal combustion engines and parts, pumps of all types, ACs and refrigerators grew by 27% to $ 1.37 billion in September on a year-on-year basis.
Automobiles exports comprising motor vehicles and cars, two and three-wheelers, auto components and parts reported a 25% y-o-y growth to clock $1.47 billion export in September.
But some other categories such as Zinc, Lead and Tin exports registered a negative growth mainly on the account of decline in demand from China.
While aircraft and spacecraft parts and products recorded a decline of more than 46% in September this year on a y-o-y basis, the ships, boats, floating products and their parts recorded a huge decline of 83%.
Need to carefully vet trade deals
Exporters also urged the government to fast-track the trade negotiations with other countries and trade blocs but cautioned about the past experience.
"The FTAs signed earlier led to an increased import especially in the ferrous and non-ferrous metal sectors from countries such as Korea and Japan. Hence it is important for India to take a cautious stand while signing the new FTAs," Mahesh Desai added.
