A slowdown in economic activities triggered by multiple factors from a war to crumbling demand globally saw India’s engineering exports, a mainstay for the country, decline in as many as 19 out of 25 key markets in October.
Overall engineering exports fell 21.3% last month to $7.4 billion compared with $9.4 billion in October, 2021. It is the fourth consecutive month that exports have declined on a year-on-year basis, engineering exporters body EEPC India said on Thursday.
Engineering exports to China slumped 64% to $227.8 million ($633.8 million), the greatest dip among the 25 destinations that contribute to about 75% of the total engineering exports. Shipments to the European Union (EU) were 23% less at $1.26 billion ($1.64 billion), while exports to North America fell 10.7% to $1.66 billion ($1.85 billion).
Domestic as well as global constraints were behind the continuous decline in engineering exports. With the 2022-23 target set by the Centre at $127 billion, the April-October target on a pro-rata basis works out to $74.1 billion. However, for the seven months ended October, exports clocked $62.50 billion. On a year-on-year basis, this was 2.2% less.
“Merchandise exports from India fell sharply for the first time in nearly two years in October 2022,” Chairman Arun Kumar Garodia said. “The numbers seem to be in line with forecasts made by various global agencies. We, however, expect India to be much less impacted by the global slowdown,” he added.
High inflation in developed regions, falling demand in China, slowdown in the EU and fear of a slowdown in the U.S. and the Russia-Ukraine war were among major reasons behind a significant slackening of demand, he said in a release.
While recent trends point to challenging times ahead, at least in the near term, the government’s decision to withdraw 15% duty on steel products would help the engineering sector as the levy had impacted shipments of steel and its products, he said.