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India’s engineering goods exports posted a growth only in China and Singapore in April 2020, while shipments declined sharply in other top markets like the US, the UAE and the EU as the world struggled to cope with the Covid-19 disruptions.
“Only Singapore and China, out of top 25 destinations of India’s engineering exports, could manage a positive year-on-year growth in April, 2020, while the rest conceded massive contraction, up to 91 per cent in some cases, due to a hugely disruptive impact of Covid-19,” as analysis by Engineering Export Promotion Council of India showns.
Singapore is the top importer
Singapore replaced the US as the number one destination for Indian engineering exports. “The US has been our number one market, while the UAE, EU countries and some of our neighbouring SAARC nations were other major destinations. Numbers have turned on their heads under the Covid-19 impact. Even as most economies are trying hard to re-open, it would be long before exports can reach a level of re-assurance,” EEPC India Chairman Ravi Sehgal said.
Total engineering exports fell 63.93 per cent in April 2020 to $ 2.31 billion from $ 6.41 billion in the corresponding month of 2019, as per data shared by EEPC.
Exports to Singapore, however, grew by over 95 per cent during the month to $ 553 million from $ 283 million in April 2019. India’s engineering exports to China grew by more than 19 per cent to $ 173 million in April, 2020 from $ 145 million in April 2019.
On the other hand, engineering shipments to the US, declined by about 75 per cent to $ 222 million during the month, compared to $ 883 million in the comparable month of 2019.
Exports to Nepal and Mexico dropped by more than 91 per cent in April to $19 million and $17 million respectively.
New challenges
Engineering exports face both internal and external challenges with the small and medium enterprises finding it even more difficult to stay afloat, the analysis noted.
Raw material shortages, essentially steel, the non-availability of work force, unviable fixed costs and disruptions in the logistics are among the major domestic problems. On the other hand, restrictions on movement of people and goods, rising trade barriers and geo-political issues remain challenging areas.
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