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India’s latest Free Trade Agreements (FTAs) with the UAE and Australia have delivered positive results for engineering goods manufacturers with exports from the sector to both the nations rising 9 per cent in the April-August period of the on-going fiscal, despite an overall decline in exports of the items during the period.
Engineering exports to the UAE in April-August 2023-24 rose 9 per cent (year-on-year) to $2.24 billion while shipments to Australia, too, increased 9 per cent to $596.14 million, per figures released by EEPC India on Friday. Overall engineering exports in the first five months of the fiscal dropped 4.55 per cent to $44.62 billion.
“At this point, we urge the government to think about more such FTAs not only with our traditional partners but also our non-traditional markets in Latin America and Africa,” said EEPC India Chairman Arun Kumar Garodia.
Interestingly, engineering exports to Russia surged 178 per cent (year-on-year) to $568.41 million in April-August period of FY24. Russia is looking out for importing more items from India to use up the rupee balance in its Vostro accounts that is piling up due to defence payments made by India in local currency.
Fall in exports to US
Engineering exports to the US, India’s top market, on the other hand, fell 14 per cent year-on-year in the April-August period of the current financial year.
“This fiscal, so far, has been tough for engineering exports as global slowdown has affected some of India’s major partners, including the USA and European countries. The Russia-Ukraine conflict has also been on-going, and China has faced economic slowdown. All these factors have significantly affected India’s engineering export demand,” the statement added.
- Also read: India, Peru to restart negotiations on FTA
Engineering exports posted a growth of 7.73 per cent in July 2023 to $9.05 billion, after eight straight months of year-on-year decline, largely because of a low base, the EEPC noted. The share of engineering exports in India’s total merchandise exports was 26.26 per cent in August 2023, per government data.
Region-wise, year-on-year growth in August 2023 was noted in CIS, other European countries, WANA, NE Asia, EU,Sub Saharan Africa, and Oceania. Regions witnessing drop in exports during August 2023 include North America, ASEAN countries, South Asi, and Latin America.
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