Downward trend in engineering goods exports to China continued in June with total shipments value declining 55 per cent year-on-year to $232.78 million during this month reflecting the impact of recurring Covid scare and complete shutdowns in key cities. The decline in June exports numbers was steeper than May (52.2 per cent) and April (48.2 per cent) this year.
Overall in the first quarter (April-June) of the current financial year, India’s engineering exports to China remained much subdued, registering 51.90 per cent year-on-year decline to US$ 662.90 million. In the first quarter of the previous financial year (2021-22), the value of engineering exports to China had stood at $ 1378.20 million.
“China is one of the major export destinations for Indian engineering goods. Our analysis indicates that fall in demand in China amidst Covid spread fears and the subsequent lockdowns in big trading centres have been a cause of slowing exports from India,” said Mahesh Desai, Chairman, EEPC India, in a statement.
Desai further added in the statement, that while exports to China fell, the situation was further exacerbated by the imposition of export duty on certain steel products including stainless steel products. “As per the industry, the move to impose export duty on certain steel items particularly hurt them at a time when there are ample opportunities for Indian exporters as global supply is affected by the growing Ukraine-Russia conflict and complete shutdown in certain Chinese cities,” he commented.
As against a 23.4 per cent and 7.1 per cent rise in ‘iron and steel’ exports in April 2022 and May 2022 respectively, in June 2022 exports fell down by 33.3 per cent. The extent of fall also impacted the overall quarterly growth of India’s iron and steel exports at (-)5.08 per cent. The latest trade data shows exports of ‘iron and steel and its products’ fell 17.7 per cent year-on-year in June 2022 to US$ 2.30 billion as compared to $2.79 billion in the same month last year.
Engineering exports from India were recorded at $9.69 billion during June 2022, which was a 4.2 per cent increase from the exports of US$ 9.30 billion recorded in June 2021.
The US continued to be the top importer of India’s engineering goods both in the month of June as well as during the quarter. Engineering exports to the US jumped 28.59 per cent in June 2022 to $1.67 billion as against $1.30 billion in the same month last year. Cumulatively, exports to the US during April-June period of FY23 surged 48.09 per cent to $5.31 billion as compared to $3.59 billion in the corresponding period of FY22.
Top five countries which witnessed positive growth during June 2022 were the US, Germany, Mexico, UK and Bangladesh. As many as 27 out of 34 engineering panels witnessed positive year-on-year growth in exports during June 2022 vis-a-vis June 2021. Major decline was witnessed in iron and steel, copper and its products, lead and products, industrial machinery for boilers, etc.
Similarly, on a cumulative basis also, 27 out of 34 engineering panels recorded positive growth during April-June 2022-23 over the same period last fiscal. In terms of region, maximum growth in exports was witnessed in North America followed by the EU in both monthly and cumulative terms.
Share of engineering in total merchandise exports was recorded at 23.86 per cent in June 2022 while the share was 24.35 per cent during Apr-June 2022-23. “Overall the global economic situation is still not stable and while newer opportunities are emerging amidst the crisis the industry needs to be prepared in all aspects including pricing, quality and exportability of its production to grab those opportunities,” Desai added in his statement.