Buoyed by rising global demand and increased economic activities, exports of 32 out of 33 engineering goods categories such as iron and steel, non-ferrous metal products, industrial machinery and office equipment recorded positive growth in March, 2021 signalling good times for exporters reeling under loss for the past one year due to pandemic.
“While recovery in the last few months of the fiscal offers a ray of hope for the sector, the rising number of Covid cases poses a downward risk. In order to contain the virus spread, many states have imposed restrictions. This could affect exports and the worst impacted would be MSMEs. The government therefore needs to expedite vaccination to lessen the impact of pandemic,” said Mr Mahesh Desai, Chairman, EEPC India.
The US continued to be on the top of the list of major export destinations. Engineering goods exports to the US stood at US$ 1152.82 million in March 2021, up 25.71% compared to US$ 917.02 million in the corresponding month a year ago. But exports to the US fell down in cumulative terms during FY21.
Exports to China, India’s second largest export destination recorded sharp monthly as well as cumulative jump. At a total export value of US$ 553.06 million, shipments to China rose 337.40% during March while cumulative FY21 growth rate was 127.66%.
The UAE retained its third position of largest export destination for Indian engineering sector although it recorded negative export growth both in cumulative and monthly terms.
As per data compiled by EEPC, exports to 21 out of 25 top markets including US, China, Singapore and Germany saw shipments from India rising during this period.
In February, year-on-year increase had been seen only in case of 9 key countries. They included China (68.03%), Singapore (23.10%), Germany (14.30%), Italy (34.39%), Thailand (33.02%) and South Africa (6.52%).
Region wise, European Union (EU) ranked as the numero uno destination leaving North America behind with a share of 18.5% of total engineering goods exports in 2020-21.
India’s exports to North America ranked second with 18% share while ASEAN region accounted for 15.4%.
Engineering exports saw impressive growth in March, 2021 with the total export value increasing to US$ 8.73 billion from US$ 5.20 billion in the same month previous year.
India’s merchandise export in March 2021 was recorded at US$ 34.45 billion as against US$ 21.49 billion during March 2020 exhibiting a growth of 60.29%. The high double-digit growth rate in total merchandise and engineering goods exports is mainly on account of low base in the previous year due to the outbreak of Coronavirus pandemic.
With progressive opening of the economy and economic activities on the rise, all segments of engineering goods other than motor vehicles & cars logged positive growth with some of them showing stellar performance in the fag end of the fiscal. For instance, exports of iron and steel recorded a massive jump to the extent of 168% in March 2021 compared to the same period last year.
Positive export performance was noticed in all product group of industrial machinery like boilers (64.49%), internal combustion engines and parts (51.94%), pumps and valves (61.72%), air conditioner and repair machinery (28%), industrial machinery for dairy (57.22%), machine tools (86%), other machinery (30%) during March 2021 compared to same period last fiscal.
In cumulative terms, the growth was definitely negative to the extent of 9.13%, given the significant decline in exports witnessed in all the sub sectors during April-March 2020-21.
Only motor vehicles and cars in the entire automobile sector witnessed negative growth to the extent of 0.94% during March 2021 compared to March 2020.
“Out of 33 engineering panels, only 1 panel (motor vehicles and cars) recorded a marginal dip. The remarkable jump in other categories is a harbinger of good times for our exporting community,” said Mr Desai.
Global trade in goods during 2020-21 recorded a decline of 9% as per the latest UNCTAD data. However experts around the world have indicated that gradual recovery of economic activities across the globe and especially in East Asia in the last few months have been able to limit the global trade decline to single digit level.
