l

Exports of engineering goods, one of the top export items from India, declined 10.85 per cent in September 2022 (year-on-year) to $ 8.4 billion as continued imposition of export duty on items of iron and steel by the government and economic slowdown in China and the EU, that account for nearly a fourth of exports from the sector, took a toll.

With China continuing its stringent pandemic restrictions, engineering goods exports from India less than halved to the country, to $203.61 million, in September 2022, while exports to the EU declined 6.3 per cent to $1.61 billion, according to figures released by the Engineering Export Promotion Council India (EEPC) on Friday.

Achieving the export target of $ 127 billion set by the government for financial year 2022-23 is a challenge now, as in the first six months of the fiscal cumulative increase in engineering exports was a marginal 1.15 per cent to $55.14 billion. This is way short of the half-way mark.

Outlook for 2023

India’s overall goods exports have also slowed down since July 2022 and posted marginal rise over exports in the comparable period of 2021. The outlook for 2023 is also not encouraging with the WTO recently forecasting a decelration in world trade growth to 1 per cent from an earlier prediction of 3.4 per cent.

“Engineering exports have been experiencing a downward trend… This decline can be majorly explained by the falling steel exports – in September alone exports of iron and steel came down by more than 60 per cent and in cumulative terms the drop was more than 30 per cent,” said EEPC India Chairman Arun Kumar Garodia.

This decline has been a direct result of the 15 per cent export duty on iron and steel products applicable since May 21st 2022, he added.

Export duty

EEPC India has requested the government to look into a possible withdrawal of export duty, especially on the stainless steel segment, since these are major export products for India mainly produced by MSMEs and also have low domestic demand, Garodia said.

Share of engineering goods exports in total goods exports declined to 23.69 per cent in September 2022 from 27.85 per cent in the same month last year.

The drop in steel exports has impacted India’s potential in various key markets including Europe, North East Asia and Africa, EEPC highlighted.  

Export decline

Among the 25 key markets for Indian engineering goods, exports to 15 countries declined in September 2022. The US remained a top market with engineering goods exports to the country increasing 9 per cent to $ 1.51 billion.

In the EU, the countries to which exports declined in September included Germany, Italy, Belgium and Spain. Exports of engineering goods to the UK, which is out of the EU now, also suffered a blow with shipments declining 37.9 per cent to $217.89 million.

Related Topics
comment COMMENT NOW