New Delhi: The ongoing Russia-Ukraine war poses significant risks to the global economy and trade but it also has some positive aspects for emerging economies such as India as the sanctions imposed by the US and its allies could open new avenues for Indian exporters to replace in the global market, says President of India’s engineering exporters’ body.
India’s engineering exports recorded nearly 20% year-on-year growth in March this year as it increased to $11.13 billion from $9.29 billion in March last year. The country’s engineering exports during April-March 2021-22 stood at $112.10 billion, registering 46.12% growth over previous year. The share of engineering exports in the country’s total merchandise export stands at 26.7%.
Mahesh Desai, Chairman of Engineering Export Promotion Council (EEPC India) says that several challenges have emerged on both the global as well as domestic fronts which could act as a deterrent in maintaining the current trend of exports.
"Russia-Ukraine conflict is the most sensitive issue at present to disturb the global economy while sudden rise in Covid cases in China is also a major concern on global supply chain,” Desai said.
Desai says inflation pressure in the US and real estate instability in China would have a dampening impact on trade growth, adding that rising steel prices in India and some financial issues are also expected to act as a bottleneck to exports in the months ahead.
Stating that engineering exports crossed $ 11 billion in March 2022 for the first time in a month, Desai said there was a need to take measures to maintain this momentum. An analysis conducted by the EEPC India showed that as many as 32 out of 34 engineering product panels witnessed positive growth during 2021-22 compared to 2020-21.
Negative Y-o-Y growth during March 2022 was witnessed in copper and its products, nuclear reactors and boilers, prime mica and its products, ships, boats and floating structures, and also in tin and its products.
While negative growth in cumulative terms for fiscal 2021-22 was also witnessed in ships, boats and floating structures categories and also in aircraft, spacecraft and parts categories. Despite a decline in the export of some engineering goods, India’s engineering exports surpassed the export target of $107.34 billion for the last fiscal.
Engineering exports to the US jump by over 60%
Among the top 25 markets of India’s engineering goods, exports to the US jumped 61% in March to reach $2.02 billion as compared to $1.26 billion in the same month last year. On a cumulative basis, engineering exports to the US stood at $17.32 billion in FY22 as compared to $11.33 billion in the previous financial year, a growth of 52.8%.
Engineering exports to UAE surged 78.9% Y-o-Y in March, 2022 to $553 million. In the financial year 2021-22, exports to UAE registered a 74.3% growth to $5.57 billion as compared to $3.2 billion in FY 2020-21.
Engineering exports to China, however, declined in the month of March 2022 by 44.5% year-on-year to $316 million. The full-year growth was positive though, with total exports in FY22 to China standing at $5.45 billion as compared to $4.84 billion in the previous year.
The top 25 destinations for India’s engineering exports, such as the US, UAE, China, Germany, Italy and Singapore, account for almost 75% of total engineering exports from India.
Italy, UAE and Belgium were the top three importers of Indian Iron and Steel during 2021-22 whereas USA, Germany and UK were the top three importers of India's products of iron and steel during the same period as compared to 2020-21.
USA was the largest importer of Indian 'Industrial machinery' during 2021-22 in India's global import of the product group. Thailand and Germany were the two immediate followers of the USA. South Africa, Mexico and Nigeria were the top three importers of India's Automobiles during 2021-22.
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