Reflecting strong demand from its key markets, engineering goods exports to 24 out of 25 top nations recorded positive growth in August, 2021 blowing past its previous monthly record of US$ 9.13 billion in July.
Unlike the previous months, exports to China registered the second largest export destination witnessing positive monthly growth in August 2021. Shipments to China rose 15% in August to reach US$ 613.3 million as compared to US$ 531.3 million in the same month last year.
Malaysia was the only country which saw a negative trend in import of engineering goods from India.
The US continued to be on top of the chart with August import of engineering goods from India growing 42% to US$ 1.3 billion as compared to US$ 916.5 million in the same month last year.
All the European countries for India’s top 25 engineering export destinations – Italy, Germany, Turkey, Belgium, UK, Poland, Spain and France recorded high positive growth during August as well as on a cumulative basis this fiscal.
The share of India’s engineering exports to its top 25 nations accounted for 76.8% of India’s total engineering exports in April-August 2021. This significant high share is indicative of the dependence of India’s engineering export on the traditional markets.
India’s engineering exports was at its all-time monthly high for the second straight month in August. The robust performance of the sector resulted in the share of engineering goods in total merchandise exports during the previous month rising significantly.
Share of engineering in total merchandise export was 27.68% in August 2021 as against 25.82% in July, 27.19% in June, 25.44% in May, 24.83% in April 2021 and 25.36 percent in March 2021.
“In the month of August, engineering goods exports recorded more than 40% growth even when compared with the same month in 2019. It now seems that the pandemic is behind us. We are positively hopeful that as a result of a turnaround in global trade and policy support the sector would do better than expected in the full financial year,” said EEPC India Chairman Mr Mahesh Desai.
“The annual target of US$ 107 billion looks very doable even though the achievement till August fell a bit short of the target when calculated on a pro-rata basis,” he said.
During April-August period of 2021-22, India’s engineering exports have fallen short of the target set by about US$ 1.82 billion calculated on a pro-rata basis achieving 40% of the target against 42% of desired level for the full year.
Engineering exports crossed US$ 9 billion mark consecutively for the second time after the month of July, reaching an all-time high of US$ 9.21 billion in August.
Cumulative engineering exports during April-August 2021-22 stood at US$ 42.91 billion registering 66.18% growth over the shipments of April-August 2020-21 at US$ 25.82 billion.
Out of 33 engineering panels or product groups, 29 panels witnessed positive growth in exports and remaining four panels witnessed negative export growth during August 2021 vis-à-vis August 2020.
Exports of iron and steel recorded a continuous growth to the extent of 142% in August 2021 compared to the same period last year. In case of non-ferrous metals, sectors like Zinc and products exhibited negative growth in exports to the extent of 26% during the month of August 2021 vis-a-vis August 2020. All the remaining segments showed positive growth.
All the seven panels under Industrial machinery exhibited positive growth in August 2021 which led the total industrial machinery panel increase by 39% during August 2021.
Electrical Machinery and equipment which is a major engineering exporting sector for India experienced a growth in exports both monthly and on cumulative basis increasing to the extent of 26.8% from US$ 692.9 million in August 2020 to US$ 878.4 million in August 2021.
The automobile sector (combination of Two and Three wheelers and Motor vehicles and Cars) recorded consecutive massive jumps in exports to the extent of 57.5% primarily due to sharp jump in exports of Two and Three Wheelers by 72.4% and Motor Vehicles by 52.5% during August 2021.
Exports of Aircrafts and Spacecraft parts and products recorded 12.8% negative monthly growth while ‘Ship, Boats and Floating Bodies’ exhibited a monthly decline of 21.7%.
“The government has relentlessly supported the industry and we hope that the two key issues of high raw material prices and container shortage would also be looked into. The industry is awaiting proper rates under RoDTEP,” said EEPC India Chairman.