EEPC-Engineering Export Promotion Council of Indiaiess-vii-Engineering Export Promotion Council of IndiaIndia Pavilion in SUBCON-Engineering Export Promotion Council of IndiaINNOPROM 2017-Engineering Export Promotion Council of IndiaIESS VI-Engineering Export Promotion Council of India

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The sixth edition of the International Engineering Sourcing Show (IESS), which was held in Chennai for the first time over 16-18 March 2017, was a grand success. The Russian Federation was the Partner Country and Tamil Nadu, the Host State of IESS VI. The Indian Commerce and Industry Minister, Ms Nirmala Sitharaman, along with the Russian Industry and Trade Minister, Mr Denis Manturov, jointly inaugurated the Show. The Exhibitor mobilisation was more diverse covering more Industry clusters which resulted in 56 percent of the participants in IESS VI being newcomers. The initial feedback from the exhibitors was extremely encouraging and this edition of the magazine gives the reader the feel of what transpired at IESS VI; the range of activities, business seminars, discussion with business school professionals together with the core objective of developing India as a sourcing hub for a range of engineering/manufacturing products.

IESS VII will also be held in Chennai during 8-10 March 2018 at the Chennai Trade Centre. We do hope that the next edition will be able to match the current year’s success and will draw in even more exhibitors and buyers from both India and globally. With global trade looking to hold up its recent gains on the back of commodity price increases, it is hoped that the next edition will reflect this optimism of businesses getting back to its normalcy globally.

India’s merchandise exports witnessed strong revival driven by a double-digit growth in February 2017 for the first time after September 2016. Merchandise exports grew by a whopping 17.48 percent year-on-year during February 2017. Imports, however, grew by a higher 21.76 percent compared to the year-ago period but trade deficit at $6.6 billion was at a five-month low. Correspondingly, cumulative exports also grew by 2.52 percent during April-February 2016-17.India’s engineering exports, once again, outperformed that of the overall merchandise export by registering a robust 48.63 percent y-o-y growth during February 2017. Overseas shipment of engineering products from India was recorded at $6.5 billion in February 2017 as against $4.3 billion in the same month last year. Engineering exports also witnessed a higher 7.34 percent growth during April-February 2016-17, driven by the substantial growth in February 2017. As a result, the share of engineering in India’s total merchandise exports surged to 26.4 percent in February 2017 from 23.9 percent in January 2017 and 23.5 percent in December 2016. A point that needs to be noted is that the growth is largely on account of steel exports of 157 percent in February 2017 and over 170 percent in January 2017 on the back of increases in global prices of steel. This will certainly continue for some time but the rate of growth will decline. However, we are exporting low value-added products like billets and ingots, instead of using them for value creation domestically. Also because of the protection given to domestic steel, products made of steel have a low exports growth and this will continue to be so till the users of steel get the benefit of international steel prices.

As global commodity prices have increased, nonferrous metal exports have also increased. Newspaper reports point out that the Government is also looking at the possibility of imposing Minimum Import Prices on primary aluminium products. If true, this seems rather surprising since global aluminium prices as per the LME prices are northward-bound.

With respect to exports of value-added products under industrial and electrical machinery, products such as pumps, machine tools, etc. the exports growth are as yet tentative and relatively less certain. In case of automotive, the motorcars segment has done well but auto-parts exports has not picked up, while that of two- and three-wheelers are positive but needs to firm up. The possible headwinds are EU GSP being reduced for a whole range of engineering segments from 1 January 2017 and the element of uncertainty with regard to US policies, which may turn protectionist in the near future. The positives are that US is expected to increase expenditure and even if there is some protectionism, India may still be able to hold its market by being competitive. I do, therefore, believe that 2017-18 will see India touching 2014-15 engineering exports figure of $70 billion and perhaps even surpassing it.

The world focus in this issue is the Hannover Show, which is our annual pilgrimage. Doing Engineering without being present at this prestigious show is unimaginable for EEPC India. I do, therefore, hope that you will enjoy this issue and look forward to your comments as before.

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