Engineering exports to India’s Free Trade Agreement (FTA) partners such as Japan, South Korea, Sri Lanka and the ASEAN bloc have witnessed robust growth so far this fiscal, says an industry analysis.
Exports to traditional Western markets such as the US and Germany, that account for a big chunk of total engineering exports, however, did not contribute much to growth, the Engineering Export Promotion Council said in a release.
Shipments to Japan grew 17 per cent in the April-November period of the current fiscal to $568 million compared with the same period last year. Exports to South Korea increased by over 13 per cent to $739 million during the period.
“The Japanese economy is doing well under Prime Minister Shinzo Abe’s new economic policy direction while the manufacturing base in South Korea kept the momentum alive despite problems in the West,” EEPC India Chairman Anupam Shah said.
India’s South Asian neighbours such as Sri Lanka, Nepal and Bangladesh, that have signed various trade pacts with India including the SAFTA, have also sourced more engineering goods from India, the release added.
Engineering despatches to Sri Lanka went up 18.57 per cent to $1.34 billion during April-November 2013, while shipments to Nepal were up 20.84 per cent to $577 million.
The Western markets continued to be troublesome for the sector. Shipments to the US dropped 9.19 per cent to $3.9 billion during April-November 2013. Exports to Germany, too, fell by about 6 per cent, though overall shipments were over $1.3 billion.
“The signs of recovery in some of the key Western countries such as the US are hazy. That is why, there was a drop in overall engineering exports by over 14 per cent in November this year,” Shah said.