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UAE and Australia FTAs boost engineering exports, shipments up 9% in April-August period of FY24

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NEW DELHI : India’s engineering exports received a much-need boost on account of free trade agreements (FTAs) with UAE and Australia with shipments to both nations surging 9% in April-August period of the financial year 2023-24 even as overall engineering exports slipped during the period under review.

Engineering exports to UAE in April-August period of FY24 increased 9% year-on-year to $2.24 billion. In the same period, engineering exports to Australia also jumped 9% year-on-year and stood at $596.14 million as compared to $548.62 in April-August period of FY23.

Overall engineering exports in April-August period of 2023-24 dropped 4.55% to $44.62 billion as against $46.74 billion in April-August period of 2022-23.

Notably, engineering exports to Russia surged 178% year-on-year to $568.41 million in April-August period of FY24.

In the same period last year, engineering exports to Russia were $204.17 million.

Engineering exports to the US, India’s top market, fell 14% year-on-year in the April-August period of the current financial year.

“Engineering exports to UAE and Australia have been beneficial. Our exports to both the two major markets rose 9% in April-August period of FY24. 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,” EEPC India Chairman Arun Kumar Garodia said in a statement.

This fiscal so far has been tough for the 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 ongoing and China has faced economic slowdown. All these factors have significantly affected India’s engineering export demand.

On cumulative terms, 19 out of 34 engineering panels recorded positive growth during April-August 2023-24 over the same period last fiscal. Engineering panels that witnessed growth in exports include copper and products, lead and tin, industrial machinery, pumps, machine tools, aircraft & spacecraft, electrical machinery and equipment, auto components /parts, medical devices and instruments, other construction machinery, etc. Major decline was witnessed in the rest of the 15 engineering panels.

After eight straight months of year-on-year decline from December 2022 to July 2023, India’s engineering exports was back to growth in August 2023 registering a decent 7.73% growth over August 2022 owing mainly to a lower statistical base.

Engineering exports in August 2023 was recorded at $9.05 billion as against $8.40 billion in August 2022.

‘Electric machinery’, and ‘Copper and copper products’ managed good export growth in August 2023 while exports of ‘Aluminium and aluminium products’ declined noticeably.

Excluding the export of iron and steel, engineering exports recorded 8% year-on-year growth in August 2023. On a cumulative basis however, engineering exports excluding Iron and Steel was down by a much lower 1.50% against 4.55% overall. This shows that Iron and Steel still plays a spoilsport in the downfall of engineering exports on a cumulative basis.

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