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Increased demand from the US, Europe and the UAE pushed engineering goods exports from India to an all-time high of $9.14 billion in July 2021, growing 42.5 per cent over the same month last year, but demand from China continued to decline for the second month in a row.
Despite the healthy performance, potential risks and uncertainties flowing from the Covid-19 pandemic cannot be ignored, an analysis of the export situation done by the Engineering Exports Promotion Council of India (EEPC) pointed out, making a case for higher rates under the new input tax remission scheme announced recently by the government.
The US remained the top market with total exports of engineering goods from India growing 27.23 per cent in July to $ 1.27 billion as compared to the same month a year ago, per the analysis.
The UAE was the second-largest export market for Indian engineering products for the third time, with July shipment almost doubling to $ 518 million compared to $269.29 million in July 2020.
China was the third-largest market, with engineering goods exports from India falling 13 per cent to $ 532 million. The fall could be largely attributed to a steep 55.38 per cent decline in iron and steel exports to China from India.
Engineering goods was one of the top contributors to the encouraging performance of goods exports from India in July 2021, which touched a record high of $35.43 billion, posting a growth of 49.85 per cent over July 2020.
An increase in engineering goods exports occurs across countries with as many as 20 out of 25 key nations, accounting for 77 per cent of India's total engineering exports, recording a rise in July 2021. “This significant high share is indicative of the dependence of India’s engineering export on the traditional markets,” the EEPC analysis noted.
However, potential risks and uncertainties flowing from the Covid-19 pandemic cannot be ignored, it pointed out, adding that some of the major economies in developing Asia had been adversely impacted.
EEPC called for more support from the government and sought a review of the refund rates under Remission of Duties and Taxes on Exported Products (RoDTEP) announced earlier this month. It said that as the RoDTEP scheme, in its present form, excluded iron and steel, which was a primary input for engineering goods, the scheme’s efficacy had gone down.
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