India’s engineering exports to key markets decline in February
NEW DELHI : India’s engineering exports to 17 out of 25 key markets such as the US and China declined in the month of February 2023 primarily driven by the global economic slowdown and low demand for metals and metal products.
India’s engineering shipments to the US dipped 9.1% year-on-year in February to US$ 1.35 billion from US$ 1.49 billion in the corresponding period last year. Exports to the US registered positive year-on-year growth of 10.8% in the first 11 months of the current fiscal.
Exports to China, another key market, continued a downward trend with shipments to the neighbouring country slumping 33.3% year-on-year to US$ 205.8 million in February 2023 as compared to US$ 308.8 million in the same month last year.
On a cumulative basis, India’s engineering exports to China sank 54% year-on-year to US$ 2.4 billion in the April-February period of 2022-23.
India’s engineering exports to China stood at US$ 5.21 billion in the April-February period of 2021-22.
While the top exporting countries recording positive growth in February 2023 over February 2022 were Singapore, UAE, Saudi Arabia, Mexico, and Indonesia. The major decline observed among the top destinations includes the US, Germany, and Italy.
Region-wise, positive year-on-year growth was noted only in ASEAN and WANA (West Asia and North Africa) during February 2023. On a cumulative basis, year-on-year growth in exports was witnessed in North America followed by Latin America and Oceania while the highest decline was observed in North-East Asia.
Indian engineering exports declined for the seventh month in fiscal 2022-23 so far. In February 2023, engineering exports declined by 9.68% to US$ 8.58 billion from US$ 9.50 billion in February 2022.
Cumulative engineering exports for April-February 2022-23 also conceded a 4.24% decline over the same period last fiscal as it dropped to US$ 96.85 billion from US$ 101.14 billion in April-February 2021-22.
In rupee terms, engineering exports in February 2023 declined by only 0.52% as against 9.68% in dollar terms. On a cumulative basis, engineering exports in rupee terms recorded 3.10% growth year-on-year as against a 4.24% decline in dollar terms. This disparity was due to the year-on-year depreciation of the rupee vis-a-vis the US dollar by 10.15% during February and by 7.9% from April-February 2022-23.
Commenting on February trade data, EEPC India Chairman Mr. Arun Kumar Garodia said, “Our analysis indicates that global decline in demand for metals and metals products is mostly responsible for the negative growth in India’s exports. However, rising raw material prices especially iron and steel have also made our metal exporters less competitive in the global market.”
Mr. Garodia noted that global trade projections do not look much optimistic although there are a few positives.
“There is a forecast of slow but gradual recovery. China, the largest global consumer, is also expected to recover from its real estate and financial crisis albeit at a slow pace. In this background, India may also look towards a slow recovery,” he further said.
As per the quick estimates of the Department of Commerce, Government of India, the share of engineering exports to total merchandise exports from India was 25.57% in February 2023 while for cumulative engineering exports from April-February 2022-23, the share was 23.86%.
Out of 34 engineering panels, 10 product panels witnessed positive growth in exports during February 2023 vis-a-vis the same month last fiscal. Major engineering products like iron and steel, products of iron and steel, non-ferrous metals like aluminum, nickel, lead, tin, and other products, industrial boilers, IC engines and parts, air-conditioning and refrigeration machinery, machinery for dairy, electrical machinery, and equipment, motor vehicles/cars, two & three wheelers, bicycle parts, auto tyres, and hand tools witnessed a decline in exports during February 2023 vis-à-vis February 2022.
On a cumulative basis, 22 out of 34 engineering panels recorded positive growth during Apr-Feb 2022-23 over the same period last fiscal. The major decline was witnessed in the iron & steel segment, non-ferrous segment, two-three wheelers, railway transport, bicycle parts, and project goods.