Exports of engineered goods fell 9.8 percent to $8.41 billion in January

Cumulative machinery exports in April-January 2022-23 also fell 3.68 percent year-on-year to $88.27 billion.

In rupee terms, cumulative engineering exports grew 3.47 percent yoy. This discrepancy was due to a 7.7 percent depreciation of the rupee against the US dollar in the period April-January 2022-23 compared to April-January 2021-22.

The rupee also depreciated by 10% in January 2023 compared to January 2022.

Analysis by EEPC India showed that iron and steel exports fell by 42 percent in January 2023 compared to January 2022 and by 42.7 percent in April to January 2022-23 compared to the same period of the last financial year.

“The sharp decline in iron and steel exports was one of the main reasons behind the decline in engineering exports. The recent lifting of export tariffs on selected steel items is expected to restore iron and steel exports in the coming months provided global economic activity is healthy,” said EEPC India Chairman Mr Arun Kumar Garodia.

Iron and steel demand has fallen sharply worldwide due to several factors such as the global economic slowdown, high energy prices, the ongoing Ukraine-Russia crisis and the sharp downturn in China Aluminum and copper. For India, another critical factor has been the drop in demand in its major South Asian neighbors, including Bangladesh, Nepal and Sri Lanka, due to dwindling foreign exchange reserves in those countries,” Mr Garodia said.

According to the quick estimates of the Ministry of Commerce of the Government of India, the share of machinery exports in the total goods exports from India in January 2023 was 25.55 percent, while the share of cumulative machinery exports in the period April-January 2022-23 cents.

Data shows that 15 out of 34 engineering panels in January 2023 recorded positive year-on-year export growth from the same month last fiscal year.

Technical products such as iron and steel and non-ferrous metals such as copper, aluminum, tin and other products, industrial boilers, internal combustion engines and parts, air conditioning and refrigeration equipment, dairy machinery, two- and three-wheelers, bicycle parts, car tires and hand tools recorded a decline in January 2023 of exports compared to January 2022.

On a cumulative basis, 21 out of 34 technical bodies reported positive growth in April-January 2022-23 compared to the same period last fiscal year. A sharp decline was recorded in the ferrous and steel segment, non-ferrous metal segment, two-three wheelers, bicycle parts, ships and boats and project goods.

Regionally, the largest export growth was in North America, followed by Latin America and Oceania cumulatively. A decline in exports was observed in Northeast Asia, South Asia, the CIS and the EU.

The top export destinations that recorded positive growth in April-January 2022-23 were the US, Germany and Mexico, while the top destination countries with negative exports in the same month included the United Arab Emirates and Italy.

In the first ten months of fiscal 2022-23, machinery exports reached 69.50 percent of the government’s full-fiscal target of $127 billion.

Regarding the prospects for the sector, the head of EEPC India said that the global situation does not look very optimistic as the IMF forecasts a decline in global growth from 3.4 percent in 2022 to 2.9 percent in 2023.

“Therefore, a further decline in demand is to be expected in the coming months. We hope that India’s recent Free Trade Agreements with Australia and the United Arab Emirates can reverse some of the negative impact of the global slowdown on India’s exports,” Mr Garodia said.