PremiumListen to this article |
BENGALURU: India's engineering exports declined drastically in August led by demand slowdown in EU and China, according to the Engineering Export Promotion Council (EEPC). Engineering exports contracted by 12.64% to $8.4bn in August.
Engineering outbound shipments to China declined by 70% in August to $173.7mn, compared to $619.5mn in the same month last year amid its zero Covid-19 strategy.
As per EEPC India analysis, engineering exports to the European Union (EU) fell 27.3% year on year to US$ 1.47 billion.
EEPC chairman Mahesh Desai pointed out that the 15% export duty on certain steel products has "seriously daunted India’s export capability in many potential markets including EU countries."
"The 15% export duty on steel continued to weigh on engineering exports as India’s iron and steel exports dropped by 62.2% in August 2022 on a year-on-year basis," said Desai.
He added that the industry believes that if the duty continues, it will seriously impact exports, especially at a time when global conflicts are generating new opportunities in many markets.
"The iron and steel sector is already going through several challenges such as the continuation of the EU safeguard on Indian steel and the impending EU GSP withdrawal," he added.
Meanwhile, the United States (US) continued to register growth and remained the top importer of Indian engineering goods in August.
Engineering shipments to the US grew 14.2% year-on-year in August to US$ 1.58 billion as against US$ 1.39 billion in the same month last year.
As many as 20 out of 34 engineering panels witnessed positive year-on-year growth in exports during August 2022 vis-a-vis the same month last fiscal. A major decline was witnessed in the metal segment. On a cumulative basis, 26 out of 34 engineering panels recorded positive growth during April-August 2022-23 over the same period last fiscal year.
"Several international agencies have predicted an economic slowdown in the US – the biggest market for Indian iron and steel. In such a scenario, we feel that the government should reconsider the export duty on steel such that the industry can make the most of the opportunities and also at the same time face the global challenges," EEPC India Chairman said.