India needs concrete plans to push back engineering exports: Industry

Deepak Kumar | The Dollar Business

Expressing concern over slowdown in India’s engineering exports, the industry has asked the government to come up with some concrete action plans to put back its international trade on the growth trajectory. In the previous financial year, total engineering exports amounted to $70.6 billion, up 15% from about $62 billion in 2013-14. The initial exports target for the year 2015-16 was $80 billion. The country’s export of engineering goods fell by 29.5% to $4.49 billion in August 2015 from $6.38 billion in August 2014, according to the government data. “The government needs to come up with some concrete schemes to push its exports. It needs to relook at the MEIS (Merchandise Exports from India) scheme and create a product-favored market. It had earlier announced a technology upgradation fund, which never kicked off. These measures need to be brought in as soon as possible,” Anupam Shah, Chairman of Engineering Export Promotion Council (EEPC), told the Dollar Business. He attributed the declining trend to the slowdown in China’s economy. “Devaluation of Chinese yuan has adversely affected India’s engineering exports. The exports witnessed a negative growth of 29% in August this year from August 2014. If this trend continues we won’t be able to surpass last year’s exports, which already look like a distant target now,” Shah said.   According to an EEPC report, the slowdown in exports has affected 73% of all the engineering segments, including steel, iron, non-ferrous metals, industrial machinery, auto components and bi-cycle parts. The report also said that out of the top 25 countries, engineering exports to 21 countries witnessed a negative growth. Only four countries — Singapore, Germany, Malaysia and the Netherlands – have recorded positive growth.  India’s engineering exports to China dropped by 43%, primarily owing to the devaluation of Chinese currency. The US and Europe account for over 60% the total engineering goods exports. Indian engineering exports to the US decreased by 13.5% in August this year. Other major destinations of Indian engineering goods, including the UK, Italy and Turkey also recorded a negative growth in August this year. Engineering exports contribute nearly 20% to the country’s overall export basket. India’s share in global engineering trade is about 1.2%, much less than China’s 12.3%.  

September 23, 2015 | 4:28pm IST.