Bengaluru, NFAPost: Standing out amongst a handful of sectors which managed to post growth, India’s engineering exports increased their share to 27.12% in the country’s overall merchandise export basket in July 2020, with a marked improvement over 22.33 per cent in April this fiscal, an EEPC India analysis has shown.
April had witnessed the biggest contraction in overall exports by 60.28 per cent, while engineering exports suffered deeper cuts of over 64%. Month-on-month situations have steadily improved since then with significant turnaround for the engineering sector.
As against 10.21% drop in India’s overall merchandise exports in July 2020 to $23.64 billion from $26.33 billion in July 2019, engineering exports, in a noticeable development, returned to a growth path with a 9.08% year on year increase.
Influence of pandemic
Engineering exports, according to the latest monthly available data for July this fiscal stood at $6.41 billion as against $5.87 billion in the same month of 2019.
Commenting on the development, EEPC India Chairman Mahesh Desai said engineering exports from India came back to growth path for the first time after the Covid-19 pandemic started damaging the economic prospect across the globe.
“During July 2020, the 9 per cent year-on-year growth of engineering exports was basically driven by higher exports of iron and steel, most of the other non-ferrous metal and metal products, ships, boats and floating structures, electric machinery and equipment,” said EEPC India Chairman Mahesh Desai, Chairman of the EEPC India.
However, EEPC India Chairman Mahesh Desai cautioned that one month positive may go either way, given a highly fluid situation the global trade finds itself in.
SME under distress
Barring far and few exceptions, engineering exports contribute the maximum to India’s total merchandise with a significant share coming from the small and medium enterprises. However, the engineering exporters’ biggest challenge is the rising cost of steel, the main raw material.
EEPC India has urged for immediate government intervention to ensure availability of steel at the export parity price especially for MSME engineering.
Blockage of MEIS Scheme is also a matter of serious concern for the exporting community.The scheme was extended in March 2020 and it was on that basis that exporters had priced their products from April 1, 2020 when suddenly on July 23, 2020, the DGFT website blocked the uploading of shipping bills and that came as a ”shock” to the exporting community.