Engineering goods exports declined for the fifth month in a row, falling a marginal 0.30 per cent (year-on-year) to $8.07 billion in November 2022, pulled down by the continued slowdown in China and the EU and the export duty on steel, according to the Engineering Export Promotion Council of India (EEPC).
Engineering goods exports to China plummeted 40 per cent in November, which was only partly compensated by a 14 per cent increase in exports to the US, according to the latest analysis of engineering goods exports and imports done by the EEPC.
Exporters, however, are optimistic about better performance in the coming months due the government’s recent decision of withdrawing the 15 per cent export duty on steel, the analysis pointed out.
Total engineering exports for April-November 2022-23 fell 1.8 per cent, over the same period last year, to $70.71 billion. Engineering exports, in the first seven months of the fiscal, achieved 55.68 percent of the $127 billion target set by the government for the entire fiscal.
Base effect
The moderation in decline of exports in November could be largely attributed to a favourable base effect as engineering exports in November 2021 witnessed a sudden decline in comparison to its preceding months in 2021, the EEPC noted.
“The 15 per cent export duty on steel continued to weigh on engineering exports. While exports of iron and steel declined 56 per cent in November 2022, the decline was around 42 per cent year-on-year during April-November 2022-23,” according to the statement.
However, the recent withdrawal of the export duty on selected steel items is likely to restore the exports of Iron and steel in the coming months, it said.
Subdued demand in the European region, primarily due to high energy prices and lower manufacturing activity mainly triggered by the Ukraine-Russia conflict, and China’s struggle to cope with rising Covid cases and a growing real estate crisis, were other factors affecting exports.