As another calendar year comes to its end, it is important to look at the journey of India’s engineering exports. December 2023 has been an overall positive month for the Indian engineering industry despite the significant global difficulties. In December 2023, engineering exports from India grew by almost 10.2 percent over the same period last year. The growth has been an outcome of the rise in shipment of metals, especially iron and steel and copper. Region-wise positive growth was noted in most of India’s traditional partners including EU, Northeast Asia, and ASEAN. The decline in North America also came down significantly to 1 percent. Significant increase in exports was also witnessed in Gulf countries such as Saudi Arabia and UAE and others such as Australia and Russia.
outcome clearly indicates the efficacy of the two new FTAs India signed with
the UAE and Australia. The positive impact of December has also narrowed down
the cumulative decline in exports. In April-December 2023, India’s engineering
exports came down by only 0.44 percent on a year-on-year basis. In terms of
achieving the export target too we are on the right track as we have already
reached $80 billion – almost 70 percent of the target of $120 billion set for
performance has come at a tough time when global trade is undergoing a slump.
We are already aware of the fact that global merchandise trade in 2023 declined
by almost $2 trillion and the outlook for 2024 remains rather pessimistic as
per the UNCTAD trade update. Apart from this, there are a number of other
demand side constraints that are also affecting exports from India.
and foremost is the critical Red Sea Crisis that has become a pain point for
Indian exporters. Red Sea is a vital route for India's exports to Europe, the
US East Coast, the Middle East, and Africa. Therefore the crisis is expected to
impact India’s trade with its key global markets. In fact, in our recent
meetings, members have mentioned several concerns including a two-to three-fold
increase in container shipping rates as well as additional almost 15 days delay
in transit time. The exporters are compelled to hold back shipments due to the
uncertainty. In summary, the shipping crisis is posing a significant threat to
our exporting community, impacting costs, timelines, and administrative
processes. Urgent interventions and coordinated efforts are required to
alleviate these challenges and support the exporting community.
policies by some of our key export markets are also a threat to Indian
engineering exporters. The recently introduced CBAM or Carbon Border Adjustment
Tax which aims to impose emission taxes on specific imports, particularly steel
and aluminium, is one example of how such protective measures may impose a significant
risk to India's exports in these sectors. EU already has tariff rate quotas on
export of steel items from India.
from the demand side issue, India’s engineering sector is also facing a number
of supply side issues including high cost of raw materials especially metals
such as steel, lack of proper quality control, etc. The positive performance of
the sector despite these issues is laudable.
our endeavour to assist our exporters on their journey, EEPC India has
continued its consultations with the government. We are continually raising our
concerns. We are also advising the government in regard to creating new markets
by forging comprehensive FTAs in Latin America and Africa, regions which were
not much explored yet. We are happy to say that we have also received the
guidance and the assistance of the Government of India.
from our consultations, EEPC India is also assisting the exporters in exploring
new markets and new buyers. In this regard, let me mention that the 11th
edition of the largest engineering sourcing show of India, IESS, which is also
EEPC India’s flagship show at home, is taking place in Coimbatore, Tamil Nadu
between 4 and 6 March 2024. The event is dealing with all engineering product
categories and is expected to bring together 300 exhibitors, 400 overseas
buyers, and 10,000 trade buyers. The show will have dedicated B2B sessions with
the potential business partners, dedicated vendor development programme, global
sourcing seminars, and display of new-age technologies. We are hopeful that
this edition of IESS would be a success and we cordially invite you to
participate wholeheartedly in this exhibition.