Propped up by automobile, electrical machinery, and aircraft products sectors, engineering goods exports revived in May 2024, posting a growth of 7.39 per cent (year-on-year) to $9.99 billion after a decline in the previous month, according to industry analysis.
While exports increased to the US, Turkey, Saudi Arabia, the UAE, as well as the West Asia North Africa (WANA) and Latin American regions, those to the EU declined significantly, according to a report shared by EEPC India.
“Overall, engineering goods exports revived in May this year compared to the previous month, and we are hopeful that the positive track will continue despite global geo-economic concerns. We also hope that the government will continue to support us in our future endeavours, especially in the upcoming budget,” said EEPC India Chairman Arun Kumar Garodia.
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A decline in metal exports, especially that of iron and steel, was an area of concern. Exports of iron & steel and related products fell 21 per cent in May 2024 to $1.56 billion. “This is chiefly due to increased competition from China, which is undergoing a decline in domestic demand and is flooding the global markets with cheaper metals, especially the markets in Southeast Asia and the Middle East. Indian metal producers are also facing certain market access issues in developed countries such as those in the EU and North America,” the report said.
Additionally, domestic demand in India has also been on the rise. In this situation, the inclusion of steel in the RoDTEP scheme may provide greater incentive for steel exporters in India, EEPC proposed.
Exports of engineering goods to the US, India’s top export destination, rose 14.4 per cent in May 2024 to $1.65 billion, while exports to Turkey more than doubled to $457.5 million.
Engineering exports to Saudi Arabia and the UAE grew 81 per cent ($617 million) and 43.2 per cent ($927 million), respectively, in May 2024. Engineering exports to China recorded a 13 per cent growth to $218.6 million.
In the April-May 2024 period, engineering exports grew 1.57 per cent to $18.53 billion.
The share of engineering exports in India’s total merchandise exports during May 2024 was recorded at a higher 26.61 per cent, up from 24.76 per cent in April 2024, according to government figures. On a cumulative basis, the share was 25.51 per cent during April-May 2024-25.