In the fiscal year 2022–2023, the US will continue to be India’s largest export market for engineering goods, with total shipments valued at USD 18.67 billion, up 6.8% annually.
The UK, Germany, Singapore, Saudi Arabia, Mexico, and Indonesia are some of the other important markets that had strong development. Month after month, China imports of engineering products decreased. Engineering shipments to China declined by 52.4% year over year in FY23, from USD 5.53 billion to USD 2.63 billion.
The other top markets that recorded negative growth during the year included the UAE, Turkey, and Thailand. After reaching their all-time high of USD 112.16 billion during fiscal 2021–22, engineering exports from India finished fiscal 2022–23 at USD 107.04 billion, a decline of 4.57 percent.
In terms of the rupee, however, engineering exports recorded 2.77 percent growth year-on-year. This disparity was due to the substantial year-on-year depreciation of the rupee vis-à-vis the US dollar in 2022–203.
The geo-political crisis in the CIS region led by the Russia-Ukraine war, the economic slowdown in North East Asia, especially China, the crisis in South East Asia, and the slowdown in Europe are the major factors responsible for the lower shipment of engineering goods from India during FY23.
According to the Quick Estimates of the Commerce Ministry of the Central Government, the share of engineering exports in India’s total merchandise exports during fiscal 2022–23 was 23.92 percent, as opposed to a higher 26.58 percent in fiscal 2021–22. Panel-wise analysis showed that out of 34 engineering panels, 22 recorded growth in exports during 2022–2023 while 12 conceded a decline in shipment.
Iron and steel were the main culprits behind the decline in engineering exports, with a 41.52 percent decline in exports during 2022–23 over the previous fiscal year. Excluding the iron and steel panel, engineering exports in 2022–23 recorded 4.91 percent growth over the previous fiscal.
Global trade sentiments continue to remain bleak. In April 2023, WTO economists said in a new forecast that merchandise trade is expected to grow by 1.7 percent, as opposed to 2.7 percent last year. The subpar performance will be mainly due to the Ukraine crisis, high inflation, tighter monetary policy, and financial market uncertainty.