Demand for Indian Engineering Items from China, Singapore, Germany
and Thailand Soars in February 2021
The share of India’s engineering exports to its
top 25 nations accounted for 75.8% of the country's total engineering exports
in April-February 2021. This significant high share is indicative of the
dependence of India’s engineering exports on the traditional markets.
China, Singapore, Germany, Thailand and Italy were among the nine
countries that saw high double-digit growth in demand for Indian engineering
goods in February, 2021.
Exports to China, India’s second largest export destination recorded a
positive growth in both monthly as well as cumulative terms.
While shipments to China jumped 68% to US$ 235.58 million in February,
exports during April-February period of FY21 saw a stellar year-on-year growth
of 114% to US$ 4276.49 million.
As per data compiled by the Engineering Export Promotion Council of
India (EEPC), USA retained its position as the top most destination for India's
engineering products but shipments to the country fell both in monthly and
cumulative (April-February 2021) terms.
India's merchandise exports were US$ 27.93 billion in February, 2021
as compared to US$ 27.74 billion in February 2020 clocking a marginal growth of
0.67%. Share of engineering in total merchandise exports was 23.49% during this
period.
"The lower exports during February 2021 could be partly
attributed to the base effect as shipments had seen a sudden surge in the
corresponding period last financial year. However, drop in shipments is
certainly a cause of concern for exporters. But given the initiatives announced
by the government and speedy roll-out of vaccination we expect the growth to
return in coming months. There is also a gradual recovery in global trade which
will have a positive impact on the export sector in India," said EEPC
India Chairman Mr Mahesh Desai.
The share of India’s engineering exports to its top 25 nations
accounted for 75.8% of the country's total engineering exports in
April-February 2021. This significant high share is indicative of the
dependence of India’s engineering exports on the traditional markets.
Region wise, North America continues to be the biggest market for
Indian engineering goods with 18.3% share while European Union (EU) and ASEAN
ranks second and third in the pecking order, as per latest data.
The EEPC analysis showed engineering exports to the EU recorded
positive monthly growth during February 2021 compared to February 2020 after a
long hiatus.
Among 33 product segments, 12 categories recorded negative growth in
February, 2021 while the remaining 21 posted positive growth.
Exports of iron and steel recorded positive growth to the extent of
42.33% in February 2021 compared to the same period last year.
Exports of products of iron and steel increased by 8.76% in February
pushing the exports of the total group by 26.53% during this period. The total
segment recorded a 6.85% increase in exports in cumulative (April-February
period of FY21) terms.
China, Vietnam and Nepal were the three top importers of Indian iron
and steel during April 2020-February 2021 with market shares of 23.19%, 8.80%
and 7.91% respectively. USA, UAE and Germany were the top three importers of
products made of iron & steel during April-February 2021.
In case of non-ferrous metals, segments like Copper and products
recorded a massive increase to the extent of 80.80% from US$ 69.69 million in
February 2020 to US$ 125.99 million in February 2021.
As against the positive trends seen in the past few months, the electrical
machinery segment showed negative growth in February 2021. Exports dropped
sharply by 21.42% in the previous month. In the auto components and parts
sector, exports of two and three wheelers and auto components parts witnessed
positive growth to the extent of 30.7% and 18.99% respectively during February
2021 vis-à-vis February 2020.
USA remained the top importer of auto components in April
2020-February 2021 with a share of 22.57% followed by Bangladesh, Turkey,
Germany and Vietnam with each having 5-6% share.
Engineering goods sector is an important component of the broader
manufacturing sector. It accounts for about 25% of India's total global exports
in the goods sector and is one of the largest foreign exchange earners. The
sector employs nearly 4 million skilled and semi-skilled workers.
[Source: EEPC India]