At $9 billion, engineering exports hit all time high

Chennai: Led by strong demand from the US, Europe and the UAE, engineering goods exports reached an all-time high of $9.14 billion in July accounting for one-fourth of the country’s total merchandise exports, data from Engineering Export Promotion Council (EEPC) of India showed.

“The record high exports of engineering goods reflect the overall trend in country’s merchandise exports and alsoglobal trend. While we are bullish, potential risks and uncertainties cannot be ignored. Some of the major economies in developing Asia have been impacted by the pandemic,” said its chairman Mahesh Desai in a statement. The US remained top importer of India’s engineering goods with total exports growing 27.23% YoY in July to $1.27billion. The UAE is India’s second largest export destination for the third month in a row with shipments nearly doubling to$518 million. Like the previous month, exports to China slipped to the third position and declined 13% to $532 million. Exports of iron and steel to China fell sharply by 55.4% in July.

As many as 20 out of 25 key nations accounting for 77% of India’s total engineering exports recorded positive monthly growth during July, 2021, as compared to July, 2020. This significant high share is indicative of the dependence of India’s engineering export on the traditional markets.

Desai said that support of the government would be needed in difficult times and requested for reviewing the refund rates under Remission of Duties and Taxes on Exported Products (RoDTEP).

The EEPC chairman said that iron and steel — the primary inputs of engineering goods — had been kept out of the purview of the RoDTEP scheme thus reducing the efficacy of the benefits.

“We have brought the issue to the notice of the government and hope the anomalies in the RoDTEP will be removed soon. This along with other policy support would be key to the sector achieving $107 billion export target in the current fiscal,” said Desai.

Mexico, South Africa and Nigeria were the top three importers of automobiles during April-July 2021 with 12.2%, 11.4% and 5.6% share in India’s global exports respectively over the same period last fiscal.