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Exports of engineering goods from India to Russia is soaring, thanks to the rupee payment arrangement.
In the April-November period of the current year, India’s engineering goods exports to Russia rose 138 per cent to touch $902.25 million, compared with $378.89 million in the corresponding period of last year, according to data made available to businessline by the Engineering Export Promotion Council of India (EEPC).
Engineering goods exports are growing much faster than overall exports to India, which, per the Ministry of Commerce numbers, have risen 50 per cent to $2.35 billion April-October 2023, compared with $1.57 billion in the corresponding period of last year.
“Month after month we are seeing increase in exports by 100-150 per cent, compared with the same month last year,” Arun Kumar Garodia, Chairman, EEPC, told businessline today.
EEPC is seeking the help of RBI to “streamline” rupee payment procedures, Garodia said, adding that once things are streamlined “the sky is the limit”.
Asked what exactly he wanted, Garodia said that more banks should start processing export documents.
rupee payment
India’s imports from Russia increased 62 per cent in April-October, to $35.92 billion, compared with $22.13 billion in the same period last year, due to India buying oil from Russia.
While it is not clear as to how much of India’s exports are settled in rupees, the fact is that the rupee payment system has helped.
“It is pouring orders,” says V Krishnaram, CEO and Joint Managing Director of Emerald Resilient Tyres, a ₹200-crore Chennai-based MSME which exports industrial tyres to 60 countries, including Russia. Emerald, whose tyres go onto the wheels of airport vehicles, forklift vehicles, etc, has 38 per cent of the Russian market, up from 23 per cent two years ago. Krishnaram gives credit to the Russian SBER Bank, which has opened a branch in India, for expansion his company’s exports to Russia.
FTAs with UAE, Aus
In 2022-23, India’s exports of engineering goods were worth $107 billion, lower than the record $112 billion registered in 2021-22.
Garodia said that exports in the current year would surpass last year’s $107 billion. Up till November, engineering goods exports were $70 billion, about 2 per cent lesser than in the same period last year, but Garodia was confident of making it up in the rest of the year. He said that the Free Trade Agreements that India signed with the UAE and Australia have been helpful. Engineering exports to UAE increased 8.7 per cent to $3.43 billion in April-November against $3.15 billion in the same period last year. Exports to Australia grew 3 per cent to $944 million.
Observing that exports of engineering goods do well with the countries that India has FTA with, Garodia said he was looking forward to the FTAs with the UK and the EU (Canada is on the backburner). These FTAs, he said, would give a “very big boost”.
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