Weak demand primarily from China and Europe slowed down India’s engineering goods exports drastically in the month of July 2022.
India’s engineering goods exports recorded a meagre 0.20% year-on-year growth in July, reveals data compiled by EEPC India from Directorate General of Commercial Intelligence and Statistics (DGCI&S) and Quick Estimates published by the Government of India.
Engineering exports growth in July remained in positive territory but recorded the sharpest deceleration in the last four months of the current fiscal. India’s engineering goods export is estimated at US$ 9.56 billion in July as compared to US$ 9.55 billion in July 2021.
After a stellar performance in the last fiscal, engineering export growth has come down gradually in the first four months of the current fiscal. The Y-o-Y growth in June 2022 (4.2%) fell significantly compared to that of May 2022 (12.8%) and April 2022 (19.8%).
India’s exports to China in July plummeted 57.9% which is higher than the rate of decline in the previous months – 55% in June 2022, 52.2% in May 2022 and 48.2% in April 2022. During July, India’s engineering exports to China stood at $225.9 million as against US$ 537.1 million in July 2021. Engineering exports to the European Union, India’s key export destination, fell down 15.8% in July 2022 to $1.68 billion as compared to $1.99 billion in July 2021.
The US remained the top importer of Indian engineering goods in July recording 21% YoY growth to $1.64 billion as compared to $1.36 billion in the same month last year. Engineering exports to the UAE declined 14.5 per cent Y-o-Y in July to $445.6 million.
EEPC India Chairman Mahesh Desai is of the view that it is not the global factors alone that have affected India’s exports in the recent months. “The export duty imposed on steel items especially that of the stainless steel products has impacted India’s export competitiveness in the global market. The current data indicates that in July alone, India’s iron and steel exports fell down by 56.1% in Y-o-Y terms. Cumulatively, the fall was around 26% for the first four months of 2022-23. There have been reports that due to the export duty, Indian iron and steel exports are becoming expensive when compared to their Chinese or South East Asian competitors,” Desai said, in a statement.
He urged the government to reconsider export duty on stainless steel products so that India’s competitive edge can be maintained. “It needs to be borne in mind that iron and steel are major components of the industry and are also one of India’s major export items. The government should also consider including this sector under the RODTEP scheme,” he added.
ETRise MSME Day 2022 Mega Conclave with Industry Leaders. Watch Now.