Continuing the downtrend, engineering goods exports to China nosedived over 70 percent in August 2022 to US$ 173.7 million as compared to US$ 619.5 million in the same month last year.
As per Engineering Export Promotion Council (EEPC) analysis, engineering exports to the European Union (EU) fell 27.3 percent year on year to US$ 1.47 billion.
With the demand from China, the EU, and other key markets slowing down substantially, overall engineering exports in August 2022 dropped by 12.64 percent to US$ 8.4 billion as compared to US$ 9.6 billion in August 2021.
The 15% export duty on steel continued to weigh on engineering exports as India’s iron and steel exports dropped by 62.2 percent in August 2022 on a year-on-year basis.
Cumulative engineering export during April-August 2022-23 was recorded at US$ 46.6 billion as against US$ 45.1 billion during the April-August period of 2021-22, managing 3.33 percent growth.
After a spell of positive year-on-year growth since February 2022, Indian engineering exports for the first time dropped drastically in the month of August 2022.
“The preliminary data indicates that fall in iron and steel exports have been the biggest contributor to this decline – iron and steel exports in the month of August 2022 declined by 62.2 percent over the same period last year. In cumulative terms, the decline was around 37 percent. The 15 percent export duty on certain steel products has seriously daunted India’s export capability in many potential markets including EU countries,” said Mahesh Desai, Chairman, EEPC India.
Desai stated that the industry believes that if the duty continues it will seriously impact our 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.
Amid slowing demand from various markets, the United States (US) continued to register growth and remained the top importer of Indian engineering goods in August 2022. Engineering shipments to the US grew 14.2 percent year-on-year in August to US$ 1.58 billion as against US$ 1.39 billion in the same month last year. Cumulative growth during the April-August period was higher by 33.7 percent.
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.
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