Engineering Goods Exports cross US$9 bn in December after November Slip

· Shipments to US Jump

There is great opportunity for engineering MSMEs to increase their share in global value chain: EEPC India Chairman

The US continued to be the top destination for engineering exports from India followed by UAE and China.

[ABS News Service/24.01.2022]

On course to achieve US$ 107 billion export target, engineering goods exports to 22 out of the top 25 markets remained positive in the month of December, 2021 with the only exceptions being Malaysia, Singapore and Saudi Arabia.

The top 25 nations account for 75% of India's engineering exports.

The US continued to be the top destination for engineering exports followed by UAE and China.

During December 2021, value of outward engineering shipments crossed US$ 9 billion registering 40% growth over the corresponding month in the previous year.

Exports to the US jumped 58% year-on-year to US$ 1.57 billion in December.

Shipments to China during the month of December soared 80% during this period to US$ 410 million while exports to the UAE surged 113% year-on-year to US$ 557 million.

Increase in exports was also witnessed in all regions including ASEAN and Latin America in both monthly and cumulative terms

"Of the US$ 107 billion target set for engineering exports in the current financial year, the industry has already achieved 76.2%. Given the fact that exports generally exhibit an upward trend in the last quarter of any financial year, engineering exports are expected to achieve their target within stipulated time," said EEPC India Chairman Mr Mahesh Desai.

He noted that while the numbers are so far very impressive there is much volatility in the global market especially around pandemic.

"Unpredictable swings in major markets compounded by increase in raw material prices and shortage of containers will continue to mar rapid global economic recovery as is mentioned by several trade experts through WTO and UNCTAD," he said.

He stated that countries would diversify their supplier and buyer base going forward and hence it offers great opportunities for Indian MSMEs to be part of the global supply chain (GVC).

"In a recent study by EEPC India on MSME participation in Global Value Chains (GVCs), it has been witnessed that compared to its peer countries in the Asia Pacific region, India’s participation as well as contribution to GVCs is not significant," he noted.

During December, barring “Aircraft, spacecraft and their parts”, all the other 32 engineering panels witnessed positive year-on-year growth in exports.

Iron and steel exports recorded 110% year-on-year growth in December with the total shipments value estimated at US$ 1.71 billion. Exports of products of iron and steel also increased 32% to US$ 839 million.

Exports of non-ferrous metals and products made of non-ferrous metals saw 67.6% year-on-year growth in December to US$ 1.35 billion.

Industrial machinery segment exports comprising IC engines and parts, air-conditioners and refrigerators and pumps among others logged 28.6% year-on-year growth in December, 2021 with the total shipment value estimated at US$ 1.52 billion.

Automobiles segment exports rose 11% to US$ 1.71 billion led by auto-components.

'Aircraft and spacecraft parts and products' saw a 6.4% year-on-year dip in exports during December 2021 to US$ 108.2 million.

'Ship, boats and floating products and parts' recorded 11.% increase in exports during this period.

As per the Quick Estimates of Foreign Trade for December 2021 released by the Department of Commerce, Government of India, the share of engineering in total merchandise export was 25.89% in December 2021 as against 26.89% in November 2021.

On a cumulative basis, the share was 27.13% during April-December 2021-22.

Engineering goods sector is one of the key foreign exchange earners and labour-intensive sector providing jobs to a large section of workers. It has been one of the key growth drivers of India's exports. Engineering sector is an important component of the broader manufacturing sector and the share of engineering production in overall manufacturing output is quite significant.

It may be mentioned that manufacturing has 77.63% weightage in India’s industrial production.

Cumulative engineering exports from India during April-December 2021-22 stood at US$ 77.94 billion which was a substantial 53.83% higher over the exports of April-December 2020-21 at US$ 50.67 billion.