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Engineering
exports to US stay positive in FY26 Despite Trump Tariffs, Shipments to WANA Region
slumps 51% in March Due to West Asia conflict
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The
combination of sectoral resilience, market diversification, and targeted policy
interventions will remain critical for sustaining export momentum and progressing
towards long‑term
export targets: EEPC India
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India’s
engineering exports reached an all-time high of $122.43 billion in FY26, growing
4.86% from $116.75 billion in FY25.
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The United
States remained the largest market for Indian engineering goods despite high tariffs
imposed by the Trump administration.
·
Exports
to the US rose 2.3% year-on-year to $19.60 billion in FY26.
·
Exports
to the UAE and Saudi Arabia declined sharply by 10% and 13%, respectively, during
FY26.
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Major markets
showing growth included Germany, the UK, China, Italy, South Africa, Vietnam, Sri
Lanka, and Malaysia.
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Engineering
exports in March 2026 rose 1.13% year-on-year to $10.94 billion despite disruptions
caused by the Iran war and closure of the Strait of Hormuz.
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Out of
34 engineering product categories, 26 recorded export growth during FY26.
·
Exports
to the West Asia and North Africa (WANA) region fell 50.7% in March 2026 due to
supply chain disruptions.
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March exports
to:
o UAE plunged 67%.
o Saudi Arabia declined 45%.
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Geopolitical
tensions also affected warehouse and transshipment operations in the UAE, an important
hub for Indian exporters.
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EEPC India
Chairman Pankaj Chadha said the sector showed strong resilience despite geopolitical
and logistics challenges.
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He credited
government support measures, including the ₹497 crore RELIEF Scheme, for helping
exporters manage:
o War-risk insurance costs,
o Insurance premium volatility,
o Elevated logistics expenses.
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Engineering
exports accounted for 27.71% of India’s total merchandise exports in FY26 and 28.11%
in March 2026.
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Regional
export performance:
o North America: up 1.9%.
o European Union: up 8.6%.
o WANA: down 8%.
o Other Europe: down 4.5%.
o CIS region: down 5.9%.
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India aims
to achieve $250 billion in engineering exports by 2030, with diversification and
policy support expected to drive future growth.
Despite
high tariffs imposed by the Trump administration, the US remained the top destination
for Indian engineering goods in the financial year ending March 2026, recording
2.3% year-on-year growth to US$19.60 billion.
The
trend shows the sector's resilience and the exporting community's ability to navigate
back-to-back challenges.
Among
the 25 key destinations for Indian engineering goods, exports to the second-largest
market, the UAE, and the fourth-largest market, Saudi Arabia, however, slumped by
10% and 13%, respectively, in 2025-26 (FY26).
The
key markets that saw shipments of Indian engineering goods rising during FY26 included
Germany, the UK, China, Italy, South Africa, Vietnam, Sri Lanka, and Malaysia.
Overall,
Indian engineering shipment from India was recorded at an all-time high of US$122.43
billion in FY26 as against US$116.75 billion in the previous fiscal, thus registering
a growth of 4.86%.
The
month of March 2026 witnessed 1.13% year-on-year growth in engineering exports over
March 2026 even at the time of extreme supply disruption following the Iran War
and subsequent closure of the Strait of Hormuz. Engineering shipment from India
in March 2026 rose to US$10.94 billion from US$10.82 billion in March 2025.
Among
the 34 product panels as defined by the Directorate General of Commercial Intelligence
and Statistics (DGCI&S), as many as 26 product panels achieved year-on-year
growth in exports during fiscal 2025-26, while only eight conceded declines over
the previous fiscal.
During
March 2026, exports to the West Asia and North Africa (WANA) region dropped by as
much as 50.7% due to supply chain issues following the closure of Hormuz. Among
the major exporting countries, exports to the UAE and Saudi Arabia experienced substantial
year-on-year drops of 67% and 45%, respectively, during this period.
With
the UAE being a trade-transshipment hub, several Indian exporters have warehouses
there for further trade with Europe, Africa, and the USA. The recent geopolitical
conflicts in the region have also impacted these warehouse activities.
Commenting
on export data, Mr. Pankaj Chadha, Chairman, EEPC India, said that Indian engineering
exports exhibited remarkable resilience as it achieved record value for the second
consecutive year.
"The
export growth came at a time when global trade faced unprecedented challenges in
the form of the geopolitical crisis in the Middle East and West Asia, which blocked
one of the key sea routes in the region. Despite these external pressures, India’s
overall engineering exports remained positive in FY26 in North America, Europe,
Latin America, etc. Only exports to the WANA region suffered due to the direct consequence
of the conflict. This stellar performance is surely a testament to the perseverance
and determination of our exporting community," Mr. Chadha said.
The
export performance in FY26 is significant in the context of India’s medium‑term objective of achieving US$ 250 billion
in engineering exports by 2030. Sustaining growth in a year characterised by global
uncertainty strengthens the foundation for accelerated expansion in the coming years.
While
appreciating the government’s timely support, Mr. Chadha said that policy measures
announced during the year, including the Resilience & Logistics Intervention
for Export Facilitation (RELIEF) Scheme with an outlay of Rs 497 crore, contributed
to trade continuity during the WANA crisis.
The
RELIEF scheme is aimed at addressing war‑risk insurance, insurance premium volatility, and elevated logistics
costs.
The
EEPC India Chairman added, "Going forward, the combination of sectoral resilience,
market diversification, and targeted policy interventions will remain critical for
sustaining export momentum and progressing towards long‑term export targets."
As
per the quick estimates of the government, engineering is the largest component
of merchandise exports. In FY26, its share of the total merchandise exports was
27.71%. The share in March 2026 was even better at 28.11%.
Among
the exporting regions, engineering exports to North America increased by 1.9% while
those to the European Union increased by a higher 8.6% in 2025-26 over the previous
fiscal. Exports to all other regions increased in 2025-26 except WANA, Other Europe,
and CIS. While exports to WANA dropped by 8% in FY26, engineering shipments to Other
Europe and CIS fell by 4.5% and 5.9% year-on-year, respectively.