India’s engineering exports have encountered a challenging global trade environment as major markets like the United States, the European Union (EU), and China experienced continued decline in June 2023, according to the Engineering Exports Promotion Council of India (EEPC). On the other hand, the country’s shipments to West Asia and North Africa (WANA), North East Asia, and CIS countries demonstrated positive growth during the same period, providing a silver lining amidst the downturn.
The decline in engineering exports for the third consecutive month has raised concerns among industry players and policymakers in India. In June 2023, the exports witnessed an 11 per cent year-on-year decrease, reaching USD 8.53 billion. The subdued performance can be attributed to various factors impacting global trade dynamics, including geopolitical tensions, economic uncertainties, and the lingering effects of the COVID-19 pandemic.
The United States, the EU, and China have traditionally been significant trading partners for India’s engineering sector, contributing substantially to the country’s export revenue. However, the prolonged decline in shipments to these regions is a matter of concern for exporters, who are closely monitoring the evolving trade policies and market conditions in these countries.
The reasons behind the decline in exports to major markets are multifaceted. The ongoing trade disputes and geopolitical tensions between nations have resulted in trade barriers, tariffs, and regulatory uncertainties, affecting the demand for Indian engineering products in these regions. Additionally, the disruptions caused by the COVID-19 pandemic continue to impact supply chains and logistics, further hampering export activities.
Despite these challenges, India’s engineering sector has found some solace in positive growth trends observed in other regions. Shipments to West Asia and North Africa, North East Asia, and CIS countries have shown resilience and promising expansion during June 2023. This growth is an encouraging sign for exporters, as it indicates that demand for Indian engineering goods remains intact in certain markets.
The positive growth in the WANA region can be attributed to increasing infrastructure development projects and the rising demand for engineering products in these areas. Similarly, North East Asia’s growth in engineering exports reflects the region’s strong manufacturing base and the appeal of Indian products in these markets. Additionally, the CIS countries’ growth can be linked to the strengthening trade ties and collaborations between India and these nations.
To navigate the challenges posed by the declining exports to major markets, the Indian government and industry stakeholders are actively exploring strategies to diversify their export destinations and enhance competitiveness. Efforts are underway to promote Indian engineering products in emerging markets and explore new trade agreements with other countries to expand market access.
The Engineering Exports Promotion Council of India (EEPC) is playing a crucial role in supporting exporters during these trying times. By providing market intelligence, policy advocacy, and facilitating networking opportunities, the EEPC aims to assist Indian engineering exporters in finding new avenues for growth and sustaining their businesses.
Industry experts emphasize the need for continued investments in research and development, innovation, and upskilling the workforce to enhance the quality and competitiveness of Indian engineering products in the global market. By aligning with the latest technological advancements and adhering to international quality standards, Indian exporters can reinforce their position in the global supply chain.
As the global trade environment continues to evolve, uncertainties persist, and geopolitical dynamics shift, India’s engineering sector remains resilient but faces significant challenges. Adapting to the changing landscape and exploring new opportunities in emerging markets will be essential for sustaining growth and mitigating the adverse effects of declining exports to major economies. Through collaborative efforts between the government, industry bodies, and exporters, India’s engineering sector can navigate these turbulent times and emerge stronger in the global arena.