Source: The Economic Times
The share of engineering goods in total merchandise exports from the country also increased during this financial year.
India’s total engineering goods exports in FY24 stood at $109.32 billion, up 2.13% over $107.04 billion in FY23.
According to the Quick Estimates of the Department of Commerce, Government of India, the share of engineering exports in India’s total merchandise exports during fiscal 2023-24 increased to 25.01% from 23.73% in 2022-23.
Commenting on engineering exports numbers, EEPC India Chairman Arun Kumar Garodia said that exports revived in the last few months of FY24 contributing towards the significant cumulative positive growth for the entire fiscal.
“Revival of exports was noted in many key regions including North America, EU, and North East Asia. Our new FTAs with UAE and Australia have also been effective in boosting our exports to WANA and Oceania regions,” he said, in a statement.
The engineering export trend became positive, especially in the second half of FY24 and exhibited a healthy double-digit growth in both February and March this year. The recovery in annual engineering exports was mainly due to a surge in exports to WANA (27%), N E Asia (11.6%), CIS (65%), and Oceania (2.6%).
The revival in exports to Europe was seen despite the logistics issues including the Red Sea crisis. The decline in cumulative engineering exports to neighbouring countries was mainly due to forex shortages and liquidity crunch.
Overall, although Indian engineering exports failed to achieve the government-set target of $122.8 billion in FY 2023-24, it performed well given the weak global trade trends, dwindling demand, forex crisis, and geopolitical conflicts.
“In 2023, global merchandise exports declined by 5%. Compared to that, India’s performance has been good. Although worries are there, the exporting community in India and across the world remains hopeful of 2024,” EEPC India Chairman said in a statement.
Mr Garodia further said, “The protectionist environmental policies of the EU and slow economic revival in China will continue to create uncertainties for the exporters. To create further opportunities it is essential that we increase our value-added exports. Also, new FTAs with important partners especially those in Latin America would be key for trade diversification.”
In the financial year 2023-24, as many as 21 out of 34 engineering panels recorded positive growth and the remaining 13 engineering panels including Iron and Steel, some non-ferrous sectors including Aluminium, Zinc, Nickel, and products, Other Industrial Machinery and Automobiles, Railway Transport products, Hand Tools/ Cutting Tools and Bicycle and parts recorded negative growth.
Region-wise, North America and the European Union (EU) remained India’s topmost destinations for engineering exports with a share of 20% and 19% respectively, in India’s total engineering exports. The CIS region registered the highest growth of 67.5% during April-March 2023-24 vis-à-vis the same period last year followed by WANA, North-East Asia, Other Europe, and Oceania regions.
Among top exporting destinations, UAE, Saudi Arabia, Germany, UK, South Korea, China, and Malaysia experienced positive growth in April-March 2023-24 while USA, Italy, Singapore, Mexico, Turkey, Indonesia, Bangladesh, and South Africa saw negative export growth.
Significantly, engineering exports to the US declined 5.7% year-on-year to $ 17.62 billion in FY24. Engineering exports to UAE and Saudi Arabia increased by 18.9% and 69.7% respectively in FY24.
Engineering exports to China increased marginally to $2.65 billion in FY24 as compared to $2.63 billion in the previous financial year.
Continuing the uptrend, engineering exports to Russia grew substantially in FY24 to US$ 1.35 billion from $ 733.6 million in the preceding year thus registering 84.9% growth.
At $11.28 billion, engineering exports recorded the highest monthly increase in March 2024 and a year-on-year growth rate of 10.66%.
In March 2024, as many as 27 out of 34 engineering panels witnessed positive year-on-year growth, while 7 remaining engineering panels experienced a decline. Exports of Iron and Steel, Non-Ferrous products including Copper, Aluminium Zinc, and Nickel products, Motor vehicles/Cars, and Office Equipment dropped.
Excluding the export of Iron and Steel, engineering exports recorded a higher year-on-year growth both in March 2024 and in the entire fiscal 2023-24. Lower exports of Iron and Steel therefore limited the growth of engineering exports to some extent during 2023-24.
