Engineering Exports Look Up, Thanks to China Market

· All-time high achieved: Engineering exports reached US$122.43 billion in FY 2025–26.

· Steady growth: Up 4.86% from US$116.75 billion in FY 2024–25.

· March resilience: Exports grew 1.1% in March 2026 despite disruptions, totaling US$10.94 billion vs. US$10.82 billion in March 2025.

· Geopolitical challenges: Sector faced West Asia conflict, shifting trade policies (including those linked to Donald Trump), and logistics disruptions.

· Supply chain impact: Conflict (starting Feb 28) disrupted sea routes, raised energy costs, and pushed raw material prices upward.

· Inflation pressure: WPI-based inflation rose to a nearly 3-year high of 3.88% in March 2026.

· Adaptation & diversification: Industry explored new markets and product diversification to offset risks.

· Policy support: Government initiatives and FTAs played a key role in sustaining growth.

· Outlook FY 2026–27: Industry remains cautiously optimistic, expecting easing tensions and stronger export momentum.

[ABS News Service/23.04.2026]

Engineering goods exports hit an all-time high of US$122.43 billion in the financial year 2025-26 despite multiple external challenges. Compared with the previous fiscal year, when total engineering exports stood at US$116.75 billion, this represents a growth of 4.86%.

In March 2026, when one of the key sea routes was disrupted due to the West Asia conflict, engineering goods exports recorded a marginal growth of 1.1%. During this period, total engineering exports stood at US$10.94 billion as compared to US$10.82 billion in March 2025.

The upward curve shows the Indian engineering sector's resilience and ability to adapt to new situations. This also highlights the competitiveness of the engineering sector in the global market.

The FY26 was marked by geopolitical tensions, a shift in trade policy by the Trump administration, and logistical challenges, among others. The engineering community, while dealing with these issues, also identified new opportunities and went into the market as well as product diversification.

The timely government support and the free trade agreements (FTAs) helped the industry chart out new strategies to navigate the challenges coming its way.

Going forward, we expect the geopolitical tensions to ease and conflicts to settle, paving the way for the robust engineering exports growth in the current fiscal.

The West Asia conflict that started on February 28 has caused serious supply chain disruptions, leading to a spike in energy prices. Prices of several raw materials have seen an upward trend and an inflationary trend. The WPI-based inflation in March reached almost a three-year high of 3.88%.

In light of the above, we remain cautiously optimistic about the engineering exports growth outlook in fiscal 2026-27.