India's engineering exports rise 11.8 per cent in first quarter

Business Tuesday 26/July/2022 05:56 AM
India's engineering exports rise 11.8 per cent in first quarter

New Delhi: Engineering goods exports from India rose 11.8 per cent year-on-year to $28.96 billion in the April-June quarter of the current financial year on the back of robust demand from countries like the US, Germany and Mexico, the Engineering Export Promotion Council (EEPC) of India said on Monday.

The demand from China, however, fell sharply during this period slowing down the growth momentum. A downward trend in engineering goods exports to China continued in June with total shipments value declining 55 per cent year-on-year to $232.78 million during this month reflecting the impact of the recurring COVID scare and complete shutdowns in key cities.

The decline in June exports numbers was steeper than May (52.2 per cent) and April (48.2 per cent) this year.

Overall in the first quarter (April-June) of the current financial year, India's engineering exports to China remained much subdued, registering 51.90 per cent year-on-year decline to $662.90 million.

In the first quarter of the previous financial year (2021-22), the value of engineering exports to China had stood at $1378.20 million.

"China is one of the major export destinations for Indian engineering goods. Our analysis indicates that fall in demand in China amidst COVID spread fears and the subsequent lockdowns in big trading centres have been a cause of slowing exports from India," EEPC India Chairman Mahesh Desai said in a statement.

Desai further said that while exports to China fell, the situation was further exacerbated by the imposition of export duty on certain steel products including stainless steel products.

"As per the industry, the move to impose export duty on certain steel items particularly hurt them at a time when there are ample opportunities for Indian exporters as global supply is affected by the growing Ukraine-Russia conflict and complete shutdown in certain Chinese cities," he said.

As against a 23.4 per cent and 7.1 per cent rise in 'iron and steel' exports in April 2022 and May 2022 respectively, in June 2022 exports fell down by 33.3 per cent. The extent of fall also impacted the overall quarterly growth of India's iron and steel exports at (-)5.08 per cent.

The latest trade data shows exports of 'iron and steel and its products' fell 17.7 per cent year-on-year in June 2022 to $2.30 billion as compared to $2.79 billion in the same month last year.

Engineering exports from India were recorded at $9.69 billion during June 2022, which was a 4.2 per cent increase from the exports of $9.30 billion recorded in June 2021.

The US continued to be the top importer of India's engineering goods both in the month of June as well as during the quarter. Engineering exports to the US jumped 28.59 per cent in June 2022 to $1.67 billion as against $1.30 billion in the same month last year.

Cumulatively, exports to the US during April-June period of FY23 surged 48.09 per cent to $5.31 billion as compared to $3.59 billion in the corresponding period of FY22.

Top five countries which witnessed positive growth during June 2022 were the US, Germany, Mexico, UK and Bangladesh.