Engineering goods exports grew a meagre 0.20 per cent in July 2022 (year-on-year) to $9.56 billion as weak demand from China and the EU, coupled with export duty on steel items, acted as dampeners.
“The export duty imposed on steel items, especially that of the stainless steel products has impacted India’s export competitiveness in the global market,” EEPC India Chairman Mahesh Desai said in a statement making case for its withdrawal.
While exports of 24 out of the 34 engineering panels posted some growth in July 2022, major decline was witnessed in iron and steel, copper and products, aluminium and products and lead and products, per the analysis of July data by EEPC India.
After a good performance in the last fiscal, engineering export growth has come down gradually in the first four months of the current fiscal, the EEPC statement pointed out.
While in April 2022, engineering goods exports posted a growth of 19.8 per cent, in May 2022 slowed down to 12.8 per cent, while in June 2022 it tapered to 4.2 per cent .Cumulatively, engineering exports during April-July 2022-23 recorded 8.10 per cent growth to $38.31 billion.
Iron and steel worst hit
Iron and steel was the worst hit and in July alone its exports fell by 56.1 per cent. The fall in export of iron and steel products was around 26 per cent in April-July 2022-23. “There have been reports that due to the export duty, Indian iron and steel exports are becoming expensive when compared to their Chinese or South East Asian competitors,” Desai said.
The situation may get worse for engineering exporters in the coming months going by the forecasts by economic think-tanks and multilateral agencies of a looming recession, Desai added.
The US remained the top importer of Indian engineering goods in July growing 21 per cent to $1.64 billion. Exports of engineering goods to the EU, on the other hand fell 15.8 per cent to $1.68 billion while decline in exports to China was sharper at 57.9 per cent to $225.9 million.
Engineering goods exports to the UAE, too, declined 14.5 per cent in July 2022 to $445.6 million.