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Exports of engineering goods from India this fiscal year are likely to see a significant dip due to trade wars between the US and China, and Europe and China, which have indirectly affected India due to poor demand. Restriction by the US on import of certain products from India and the worldwide spread of the Covid-19 virus has aggravated the situation, said Ravi Sehgal, Chairman, Engineering Export Promotion Council (EEPC).
“Last year export of engineering goods was $81 billion, and this year we were all set to cross that figure comfortably and even touch $85 billion. However, in the present circumstances, we would be very happy if we touch $80 billion,” he told BusinessLine on the sidelines of a press meet to announce the International Engineering Sourcing Show (IESS) IX event, which will be held in Coimbatore from March 4 to 6. The IESS is the largest engineering sourcing event in India and will see Indian and global producers showcasing their engineering innovations.
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Sehgal said the trade wars between the US and China; and Europe and China and restrictions by the US on import of stainless steel products, flanges and pipes from India were likely to badly affect export of engineering goods this year. The US said it would increase the quota for these products by 10 per cent in 2019 but ended by reducing the quota by 10 per cent, he said.
Coronavirus impact
Until this January, exports stood at $64 billion while last year the total was was $65 billion -- leading to a 2 per cent dip this year. January to March sees a boost but the Coronavirus outbreak has created logistics problems and the market in South East Asia and China has suddenly crashed. Both these markets contributed nearly 15 per cent of exports, he said.
India could have taken advantage of the trade wars. However, overseas buyers felt that the capacity in India was less or prices of the products were higher. This went against India, he said.
Copper was a major contributor to Indian exports. However, the closure of the Sterlite plant at Thoothukudi dealt a significant blow to copper exports and India is today an importer of copper, he said.
Sehgal said that Africa could potentially compensate for the loss in other markets as there is a resurgence there. The Centre is also focussing on Africa. For instance, Indian Railways and the Central government plan to finance the TransAfrica rail project, products for which have to go from India. The Indian MSME sector would be a major beneficiary of this, he said.
On the IESS IX, Sehgal said the event’s theme would be Smart Manufacturing with four pillars: subcontracting; industrial & electrical machinery; metal & shopfloor and innovation & technology. The event will feature nearly 400 exhibitors and 4,000 delegates from India and abroad. Malaysia is the partner country for the second time; Tamil Nadu is the host State; Belgium’s Flanders province is the focus region and Uttar Pradesh is a partner state.
The event is supported by the Union Ministry of Commerce and Industry, with the Department of Heavy Industry, Ministry of MSME and Department of Atomic Energy confirming their support as well, he said.
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