Engineering goods exports, which account for nearly one-fourth of total merchandise exports, declined 0.30% to USD 8.07 billion in November 2022 as compared to USD 8.10 billion in the same month a year ago.
Cumulative engineering exports declined by 1.8% year-on-year to USD 70.72 billion from April-November 2022-23.
“After the record post-Covid recovery in the last financial year, global demand has again shown a declining trend and signs of distress in the current financial year. Mainly due to higher energy prices and lower manufacturing activity in the European region Demand remains weak. This was mainly triggered by the Ukraine-Russia conflict that began last February. China, one of India’s biggest trading partners, is facing a growing real estate crisis due to rising Covid cases and low demand. is grappling with,” said Mr. Arun Kumar Garodia, Chairman, EEPC India.
He further said that there is a growing perception among the exporting community that the US Central Bank’s monetary tightening policy will impact interest-sensitive spending not only in the US but across the globe.
“Overall these factors will continue to have a negative impact on demand. The World Trade Organization (WTO) has also stated that world trade is expected to decelerate in the second half of 2022 and may continue to weaken in 2023,” Mr. he said. Garodia.
Exports to China continued to decline and fell 40% to US$ 263.62 million in November this year from US$ 439.63 million in November 2021. Cumulatively, engineering exports to China to fall by 58.2% to USD 1.74 billion in April-November 2022-23. As compared to US$ 4.18 billion in the same period last year. The United States of America (USA) remained the top destination for engineering goods from India. In November 2022, engineering goods exports to the USA are set to grow by 14% year-on-year to US$ 1.47 billion.
On a cumulative basis, engineering exports to the USA grew by 21.5% year-on-year to US$ 12.85 billion during the April-November period of FY23.
Among the 25 major destinations for engineering goods from India, 15 countries registered positive growth during November 2022, while the remaining 10 saw a year-on-year decline. These 25 countries account for about 75% of the total engineering exports from India.
23 out of 34 engineering panels saw positive year-on-year growth in exports during November 2022 over the same month in the previous fiscal.
On a cumulative basis, 22 out of 34 engineering panels registered positive growth from April-November 2022-23 as compared to the same period of the previous financial year. Major decline was seen in iron and steel segment, non-ferrous segment, cycle parts, ships and boats and project goods.
The 15% export duty on steel continued to impact engineering exports. While iron and steel exports declined by 56% in November 2021 over November 2022, the year-on-year decline from April-November 2022-23 was around 42%.
However, with the recent withdrawal of export duty on select steel items, iron and steel exports are likely to revive in the coming months. Other factors affecting India’s engineering export growth include a slowdown in economic activity in some of India’s top export destinations, including China and the European Union.
In seven months of FY 2022-23, engineering exports achieved 55.68% of the USD 127 billion target set by the government for the entire fiscal.
According to quick estimates by the Department of Commerce, Government of India, the share of engineering exports in total merchandise exports from India was 25.23% in November 2022 while the share for cumulative engineering exports from April-November 2022-23 was 23.90%.