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'Sanctions on Russia could bring opportunities for Indian engineering exporters'

Engineering exports have crossed $ 11 billion in March 2022 for the first time in a month, and EEPC believes there is a need to take measures to maintain this momentum. Photo: Bloomberg Premium
Engineering exports have crossed $ 11 billion in March 2022 for the first time in a month, and EEPC believes there is a need to take measures to maintain this momentum. Photo: Bloomberg 

  • Russia-Ukraine conflict, sudden rise in Covid cases in China, inflation pressure in the US, India's rising steel prices are issues that may act as bottlenecks to exports in the months ahead, EEPC India chairman Mahesh Desai said

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The Russia-Ukraine war poses significant risks to economies and trade globally, but sanctions imposed by several developed nations on Russia could bring opportunities for Indian engineering exporters in the global market, EEPC India chairman Mahesh Desai said on Friday.

Terming 2021-22 as a remarkable year for engineering exports, Desai said several challenges have emerged on global as well as domestic fronts that could act as a deterrent in maintaining the current trend of exports.

“Russia-Ukraine conflict is the most sensitive issue at present to disturb the global economy while sudden rise in COVID cases in China is also a major concern on global supply chain. Inflation pressure in the US and real estate instability in China would have a dampening impact on trade growth. Back home, rising steel prices and some financial issues are also apprehended to act as bottleneck to exports in the months ahead," he said.

Engineering exports have crossed $ 11 billion in March 2022 for the first time in a month, and EEPC believes there is a need to take measures to maintain this momentum.

An analysis by the council shows that the country’s engineering exports recorded 19.7% YoY growth in March 2022 by climbing up to $11.13 billion from $ 9.29 billion in March 2021.

Exports during April-March stood at $112.10 billion, registering 46.12% growth over the previous financial year. In FY22, the share of engineering in total merchandise exports was 26.7%.

As many as 32 out of 34 engineering product panels witnessed positive growth during 2021-22 compared to 2020-21.

India’s engineering exports surpassed the target of $107.34 billion for FY2021-22 set by the Government of India.

Among top 25 key markets of Indian engineering goods, exports to the US jumped 61% in March to reach $ 2.02 billion as compared to $1.26 billion in the same month last year. On a cumulative basis, engineering exports to the US stood at $ 17.32 billion in FY22 as compared to $ 11.33 billion in the previous financial year thus recording 52.8% growth.

Engineering exports to UAE surged 78.9% Y-o-Y in March, 2022 to US$ 553 million. In the financial year 2021-22, exports to UAE registered 74.3% growth to US$ 5.57 billion as compared to US$ 3.2 billion in FY 2020-21.

Engineering exports to China, however, declined in the month of March 2022 by 44.5% year-on-year to US$ 316 million. The full year growth was positive though, with total exports in FY22 to China standing at US$ 5.45 billion as compared to US$ 4.84 billion in the previous year. Top 25 countries such as the US, UAE, China, Germany, Italy and Singapore account for almost 75% of total engineering exports from the country.

Italy, UAE and Belgium were the top three importers of Indian Iron and Steel during 2021-22 whereas USA, Germany and UK were the top three importers of India’s ‘Products of Iron & Steel’ during the same period as compared to 2020-21.

The US was the largest importer of Indian ‘industrial machinery’ during 2021-22 in India’s global import of the product group. Thailand and Germany were the two immediate followers of the USA.

South Africa, Mexico and Nigeria were top three importers of India’s automobiles during 2021-22.

 

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