Engineering goods exports to 23 countries out of 25 key markets including US, China, Germany and Italy recorded positive year-on-year growth in April, 2021 as overall merchandise trade from the country surged primarily on account of base effect.
Among the top 25 export destinations for Indian engineering goods, negative growth was seen only in the case of Malaysia and Singapore.
The US continued to be the biggest market for Indian engineering goods exporters followed by China. While exports to the US jumped more than 400% year-on-year in April this fiscal, shipments to India’s second largest export destination China clocked monthly growth of 143.3% during this period.
“All the product groups other than ‘ships, boats and floating structures’ recorded positive growth during this period. The growth momentum has continued for the past few months despite Covid shadow. The high growth rate in outbound shipment is mainly due to the low base of FY21 but recovery is indeed impressive. It mirrors global trends,” said Mr Mahesh Desai, Chairman, EEPC India.
Among the 32 engineering goods categories which posted positive growth, exports of iron and steel recorded a massive jump of 210% in April 2021 compared to the same period last year. Non-ferrous segment as a whole comprising aluminium, zinc, nickel, lead, tin and other products witnessed 110.5% growth in exports during this period.
Within industrial machinery, overall there has been growth in monthly exports to the extent of 703% from US$ 146.21 million in April 2020 to US$ 1174.23 million in April 2021. Exports of the electrical machinery segment increased from US$ 245.43 million in April 2020 to US$ 853.1 million in April 2021 witnessing a growth of more than 247% unlike the pattern observed in the previous months.
Exports of aircraft, spacecraft and parts exhibited positive monthly growth by more than 200% in April 2021 scaling up from US$ 24.1 million in April 2020 to US$ 74.5 million in April 2021.
Exports of ships, boats and floating structures was the only engineering panel witnessing negative growth to the extent of 32.8% from US$ 677.4 million in April 2020 to US$ 455.4 million in April 2021.
As per data compiled by EEPC, engineering goods exports in April soared 229.74% in value terms to US$ 7.60 billion from US$ 2.31 billion in the corresponding month last year. Engineering goods account for about one-fourth of the total merchandise exports from India and therefore it has significantly contributed to the recovery in the country’s external trade.
Total merchandise exports in April 2021 were US$ 30.63 billion as compared to US$ 10.36 billion in April 2020 showing a three-fold jump. As compared to April 2019, exports in April 2021 showed a growth of 17.62% suggesting robust outlook for the sector. Exports had plummeted in April last year as outbreak of coronavirus disrupted the supply chain globally. In line with the global trends, India’s outbound trade has also made a strong rebound.
Given the upward trend, the government hopes the merchandise exports to reach US$ 400 billion in the current financial year.
EEPC Chairman Mr Desai noted that the government’s effort to bring stability in the form of continuation of major trade policies including the Foreign Trade Policy had brought considerable support to the exporting community.
While Mr Desai remained optimistic about the growth trend in the current fiscal, he said that apprehensions had risen in the past few weeks due to the devastating second wave of the pandemic.
“State governments are doing their best to ensure that economic activities are not impacted as a result of lockdowns and curfews but trade and business have not been completely insulated. It is therefore important that exporters get adequate support from the government,” said Mr Desai.