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Hit by the global economic slowdown and sharp depreciation of currency in competing countries, engineering exports from India has suffered its worst phase in recent years.
Out of India’s top 25 engineering export destinations, shipments to 20 countries have fallen in the first eight months of this fiscal. Incidentally, these top 25 countries accounted for 73 per cent of total exports between April and November.
Exports to top destinations including the US, the UAE, the UK, China, Germany, South Africa and Singapore have slipped due to economic slowdown in these countries. Shipments to 221 countries have fallen 14 per cent to $40 billion ($47 billion) in eight months of this fiscal, despite eight per cent depreciation in rupee against dollar.
TS Bhasin, Chairman, EEPC (Engineering Export Promotion Council) India, said given the current pace of exports it is unlikely that engineering exports will reach the last year’s level of $70 billion.
“At best we may end up this fiscal with shipments about $60-62 billion with a hope that things will change for the better in the next financial year,” he said.
The primary iron and steel along with non-ferrous metals and products, which contribute the maximum to the engineering export basket, witnessed a real blood bath in the export market, leaving absolutely no pricing power with the producers of suppliers, said Bhasin.
All non-ferrous metals and products barring tin and products made of tin witnessed deterioration in exports during November 2015 over the same period last year.
Railing the government on excessive protection given large scale steel firms by way of safeguard duty, Bhasin said the proposal to fix a minimum import price for steel, if cleared, will hit the last nail on exporters.
“All these measures are lopsided and overlook interest of the small and medium enterprises which are made to buy raw material at high costs losing competitive edge in the tough export market,” he said.
Overall merchandise exports have dipped consecutively for 12 months in a row. It was down 29 per cent in November. Between April and November, the country’s total merchandise exports were down 18 per cent at $174 billion ($213 billion).
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