US, UAE Top Importers of India's Engineering Goods in July

China Recorded Decline for Second Month in a Row

Led by strong demand from the US, Europe and UAE, engineering goods exports in July 2021 reached an all-time high of US$ 9.14 billion accounting for one-fourth of the country's total merchandise exports.

The US remained top importer of India's engineering goods with total exports growing 27.23% in July to US$ 1,272 million as compared to the same month a year ago.

UAE ranked as India’s second largest export destination for the third time in a row with July shipment nearly doubling to US$ 518 million as against US$ 269.29 million in July, 2020, an EEPC India analysis showed.

Like the previous month, exports to China slipped to the third position and declined 13% to US$ 532 million as compared to the same month last year. Exports of iron and steel to China fell sharply by 55.38% in July this year.

As many as 20 out of 25 key nations accounting for 77% of India's total engineering exports recorded positive monthly growth during July 2021 over July 2020. This significant high share is indicative of the dependence of India’s engineering export on the traditional markets.

"The record high exports of engineering goods reflect the overall trend in country's merchandise exports and also global trend. While we are bullish, potential risks and uncertainties cannot be ignored. Some of the major economies in developing Asia have been impacted by the pandemic," said EEPC India Chairman Mr Mahesh Desai.

Mr Desai noted that support of the government would be needed in difficult times and requested for reviewing the refund rates under Remission of Duties and Taxes on Exported Products (RoDTEP).

The EEPC India Chairman said that iron and steel which is one of the primary inputs of engineering goods has been kept out of the purview of the RoDTEP scheme thus reducing the efficacy of the benefits.

"We have brought the issue to the notice of the government and hope the anomalies in the RoDTEP would be removed soon. This along with other policy support would be key to the sector achieving US$ 107 billion export target in the current fiscal," said Mr Desai.

While 28 engineering products group out of 33 recorded positive growth in July, five panels posted decline. The year-on-year decline in Zinc and products was seen to the extent of 2.8%, it was 8% lower in Electrical Machinery and Equipment and a fall of 20.8% in case of Ship, Boats and Floating Bodies. Monthly decline in product group Aircrafts and Spacecraft was 18.4% in July.

Exports of iron and steel recorded a continuous growth to the extent of 87% in July 2021 compared to the same period last year. Furthermore, exports of products of iron and steel increased to the extent of 31.8% in July 2021 thereby resulting a growth in export of the total group by 70.8%.

Automobile sector (combination of two and three wheelers and motor vehicles and cars) recorded a massive jump in exports to the extent of 68.2% primarily due to sharp jump in exports of two and three wheelers by 99.7% and motor vehicles by 58% during July 2021.

In cumulative terms, the automobile sector experienced a positive growth of more than 140% from US$ 1295.5 million in April- July 2020-21 to US$ 3110.3 million in April-July 2021-22.

Mexico, South Africa and Nigeria were top three importers of India's automobiles during April-July 2021 with 12.15%, 11.36% and 5.64% share in India’s global exports respectively over the same period last fiscal.

Merchandise exports in July 2021 set a new all-time high on a monthly basis at US$ 35.43 billion by surpassing the previous high of US$ 34.5 Billion achieved in March 2021. The engineering goods exports crossed US$ 9 billion for the first time to reach an all-time high of US$ 9.15 billion (US$ 9,147.85 million) on a monthly basis by surpassing the previous record high of US$ 8.8 billion in June 2021.