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Chairman

Let me, at the outset, wish all the readers of this magazine a very Happy New Year and a prosperous and healthy 2018!

It is, indeed, an honour for me to take over as the 27th Chairman of EEPC India, following in the footsteps of my illustrious predecessors. I am aware of the immense opportunities as well as the challenges that the engineering industry and the exporting community face and I pledge to do my best to take Indian engineering industry to greater heights. I have some important issues that I will deal with during my tenure and hope that these will help strengthen Indian engineering industry and its exports and move towards attaining global leadership in the days ahead.

The wind is back in Indian economy’s sails. As I write my first edit, news filters in that activity in the eight core sectors of the economy accelerated to a 13-month high of 6.7 percent in November, as per the data released by the Ministry of Commerce and Industry on 1 January, with growth being propelled by the steel and cement sectors. The index of core industries had grown by 5 percent in October. In November, the cement sector grew at a record high of 17.3 percent compared with a contraction of 1.34 percent in October. The steel sector grew 16.6 percent in November, the highest growth the sector has seen since October 2016.

2018 is likely to be a turnaround year not only for the Indian economy but also the global economy which grew over 3 percent after many years in 2017. Some key developments indicate a rosy prognosis for the world and the India's economy. The demise of the Trans-Pacific Partnership (TPP), India’s 30-point jump in the World Bank’s ‘ease of doing business’ index, rollout of GST in India, announcement of Mid-Term Review of Foreign Trade Policy and the outstanding performance of India’s overall exports, are clearly some of them.

Engineering exports maintained the growth run for the 16th straight month to November 2017 and this time, the growth accelerated substantially by 43.7 percent. Overseas shipment of India’s engineering products rose to $6.9 billion during November 2017 from $4.8 billion in November 2016. Cumulative growth of India’s engineering export during April-November 2017-18 was recorded at 22.35 percent on a year-on-year basis, which was somewhat higher than the cumulative growth registered during April-October 2017-18. Engineering exports during April-November 2017-18 was recorded at $48.9 billion as against $40 billion during the same period last fiscal. As many as 29 out of 33 engineering product groups posted positive growth in November.

On 6 December, the Union Commerce and Industry Minister, Mr Suresh Prabhu, unveiled the Mid-Term Review of Foreign Trade Policy 2015-20 by announcing a slew of incentives to boost the country’s exports. On behalf of EEPC India, we have welcomed the announcement of increasing annual incentive by 34 percent to Rs8450 for labour-intensive and MSME segment. We have also submitted our representation to the Department of Commerce mentioning 

incompleteness of the list of tariff lines that have been included for the enhancement of duty benefits by 2 percent under the MEIS scheme. Our members in the MSME sector have highlighted that many who belong to this segment have been left out while carrying out the review exercise. Hand tools, Bicycle and parts, Fasteners, Industrial valves, Casting products, among others, are some of the engineering segments dominated by MSME units that should be provided with additional incentives of 2 percent. Nearly 25,000 industrial units are covered by these sectors in the aggregate.

In 2017, the rollout of GST was a historic initiative by the present government to rationalise the existing taxation system in the Indian economy by merging several central and state taxes. Unfortunately the exporting community is having a tough time since the introduction of the new indirect tax regime. Delays in processing tax refunds under GST have locked up the funds of exporters, hurting their businesses and affecting their ability to be competitive in international markets.The complicated structure has raised compliance costs for businesses. Any fresh delay in sorting these out will curb the domestic drivers of growth and restrict India’s ability to benefit from the global upturn.

We are, however, optimistic that the growth in engineering exports would continue in 2018 or even surpass this year’s level as global trade picks up and Indian manufacturing unleashes its potential.

The focus of this edition of the magazine is to look back on some of the highlights of the year gone by. The objective is to look at the recent past with a view to better the same in the current year and in the near future. It is said that time and tide waits for none and hence I wish to make the best of my years given to me at the helm of EEPC India and I seek your support with your comments and suggestions as you have done for my predecessors.

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