Engineering exports recorded around 3.3% cumulative growth year-on-year during the first five months of fiscal 2024-25

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October-2024 engineering exports hit peak growth for fiscal 2024-2025

Indian engineering exports continued its growth run for the third month in a row to July 2024 albeit a lower 3.66% year-on-year growth as against over 10% in June 2024. Cumulative exports during Apr-Jul 2024 also recorded 4.18% growth over the same period last fiscal. Share of engineering in overall merchandise exports was at an impressive 26.6% in July 2024 and 25.6% on a cumulative basis. Growth in engineering exports in July 2024 was attributed to decent rise in shipments of Electrical machinery, automobile and auto components, construction machineries including the cranes, lifts and winches, etc.

Trade Flow Export figures(in $ billion) Growth (%)
Jul-2023 Jul-2024 Apr-Jul 2023-24 Apr-Jul 2024-25 Jul-2024 over Jul-2023 Apr-Jul 2023-24 over Apr-Jul 2024-25
Engineering exports 8.08 11.19 61.50 66.59 38.53% 8.27%
Overall merchandise exports 33.43 39.20 244.51 252.28 17.23% 3.18%
Share of engineering (%) 24.16% 28.72% 25.15% 26.75% --- ---
Service Exports 28.05 34.02/td> 191.97 215.98 21.28% 12.51%

Source : Compiled from data by DGCI&S and Quick Estimates published by the Government of India

Overall Engineering Exports vs Engineering Exports Excluding Steel Segment (Values in USD Million)

Observation: Excluding the export of iron and steel, engineering exports recorded a much higher growth both on a monthly as well as cumulative basis as shown in the table above. Exports of Iron and Steel conceded nearly 27 percent year-on-year decline in July 2024 and 31.6 percent year-on-year decline during April-July 2024-25.

Trade Flow Export in Jul-2023 Export in Jul-2024 Growth (%) Exports in Apr-Jul 2023-24 Exports in Apr-Jul 2024-25 Growth (%)
Overall engineering exports 8078.48 11190.84 38.53 61499.68 66585.89 8.27
Engineering exports excluding Iron and Steel 7439.92 10364.23 39.31 54629.95 61152.46 11.94

Source : DGCI&S, Govt. of India


Engineering Exports: Monthly Trend

The monthly engineering figures for 2024-25 vis-à-vis 2023-24 are shown below as per the latest DGCI&S estimates:

Table 1: Engineering Exports: Monthly Trend in 2024-25

US$ million

Month 2023-24 2024-25 Growth (%)
April 8949.36 8366.65 -6.51
May 9300.62 9818 5.56
June 8515.72 9193.63 7.96
April-June 26765.71 27378.28 2.29
July 8720.3 8959.5 2.74
August 9048.65 9332.19 3.13
September 8886.54 9725.08 9.44
July-September 26655.49 28016.78 5.11
October 8078.48 11190.84 38.53
April-October 61499.68 66585.89 8.27

Source : DGCIS, Govt. of India

TOP 25 ENGINEERING EXPORT DESTINATIONS IN April-October 2024-25

We now look at the export scenario of the top 25 nations that had highest demand for Indian engineering products during July 2024 over July 2023 as well as in cumulative terms during April-July 2024-25 vis-à-vis April-July 2023-24. The data clearly shows that top 25 countries contribute 76.3% of total engineering exports.

Table 2: Engineering exports country wise

(US$ million)

Countries Jul-2023 Jul-2024 Growth (%) April-October 2023-24 April-October 2024-25 Growth (%)
U S A 1435.97 1551.56 8.05% 8734.23 9278.41 6.23%
U ARAB EMTS 448.36 672.13 49.91% 2695.4 3902.86 44.8%
SAUDI ARAB 455.84 388.7 -14.73% 2208.08 2613.55 18.36%
FRANCE 186.8 384.51 105.84% 1075.47 1155.04 7.4%
GERMANY 336.18 361.21 7.44% 2089.78 2087.09 -0.13%
U K 265.26 324.96 22.51% 1815.85 1942.28 6.96%
MEXICO 214.83 300.88 40.06% 1583.54 1892.07 19.48%
SINGAPORE 348.31 288.49 -17.18% 1705.92 1960.99 14.95%
SOUTH AFRICA 202.92 277.86 36.93% 1152.07 1172.39 1.76%
CHINA P RP 260.24 264.2 1.52% 1228.6 1342.8 9.3%
JAPAN 170.09 256.99 51.09% 888.43 1165 31.13%
ITALY 224.78 202.48 -9.92% 1962.85 1487.76 -24.2%
TURKEY 272.59 199.7 -26.74% 1453.33 1663.02 14.43%
NEPAL 175.36 198.94 13.44% 1175.27 1095.67 -6.77%
KOREA RP 174.53 192.73 10.43% 1400.15 1286.41 -8.12%
BRAZIL 149.02 192.58 29.23% 1004.32 1097.55 9.28%
THAILAND 162.53 179.65 10.54% 914.08 998.35 9.22%
BANGLADESH PR 169.72 175.95 3.67% 1136.18 1024.23 -9.85%
OMAN 39.93 174.57 337.25% 422.9 465.62 10.1%
NETHERLAND 163.97 151.46 -7.63% 1038.29 946.29 -8.86%
SPAIN 93.86 150.29 60.12% 787.52 694.47 -11.82%
INDONESIA 285.71 142.98 -49.96% 1577.59 1087.75 -31.05%
BELGIUM 117.03 138.35 18.22% 816.13 714.15 -12.5%
VIETNAM SOC REP 108.12 121.55 12.42% 577.96 698.32 20.82%
MALAYSIA 178.31 114.61 -35.73% 911.4 724.68 -20.49%
Total engineering exports to top 25 countries 6640.28 7407.33 11.55% 40355.33 42496.75 5.31%
Total engineering exports 8886.54 9824.33 10.55% 53421.2 56226.95 5.25%

Source : DGCI&S

REGION WISE INDIA’S ENGINEERING EXPORTS

The following table depicts region wise India’s engineering exports for April-July 2024 as opposed to April-July 2023.

In this section we look at the Engineering Panel wise exports for the month of July 2024 vis-à-vis July 2023 as well as the cumulative exports for April-July 2024-25 vis-à-vis April-July 2023-24. These are indicated in the tables below.

Table 3: Region wise engineering exports in April-February 2023-2024 vis-à-vis April-October 2023-2024

(US$ million)

Regions Jul-2023 Jul-2024 Growth (%) April-October 2023-24 April-October 2024-25 Growth (%)
NORTH AMERICA 1741.02 1949.7 11.99% 10901.79 11778.35 8.04%
EUROPEAN UNION 1488.12 1910.94 28.41% 10081.31 9701.71 -3.77%
WANA 1271.12 1614.29 27% 7339.05 9108.04 24.1%
ASEAN 1146.77 907.82 -20.84% 6104.7 5979.61 -2.05%
SSA( Sub Saharan Africa) 696.39 794.8 14.13% 4037.47 3947.24 -2.23%
N E ASIA 683.21 770.41 12.76% 3987.81 4277.14 7.26%
OTHER EUROPE 572.12 556.49 -2.73% 3459.47 3843.53 11.1%
SOUTH ASIA 543.35 521.49 -4.02% 2999.9 3040.34 1.35%
LATIN AMERICA 502.66 510 1.46% 2927.36 2927.19 -0.01%
CIS 120.11 164.24 36.74% 810.96 919.09 13.33%
OCEANIA 119.47 118.61 -0.72% 758.73 689.03 -9.19%
OTHERS 2.2 5.54 151.79% 12.65 15.69 23.96%

Note : *Figures have been rounded off.

Source : DGCI&S **Myanmar has been included in ASEAN and not in South Asia, since ASEAN is a formal economic grouping.

PRODUCT PANEL WISE ENGINEERING EXPORTS

Table 4a. Trend in exports of iron and steel and its products

(US$ million)

Product panels October-2023 October-2024 Growth April-October 2023-24 April-October 2024-25 Growth
IRON AND STEEL 755.3 739.61 -2.08% 6231.17 4606.82 -26.07%
PRODUCTS OF IRON AND STEEL 849.17 827.52 -2.55% 4885.05 4806.84 -1.6%
Sub Total 1604.47 1567.13 -2% 11116.23 9413.66 -15%

Source : DGCI&S

Table 4b. Trend in exports of Non-Ferrous Metals and Products

US$ Million

Product panels October-2023 October-2024 Growth April-October 2023-24 April-October 2024-25 Growth
Aluminium and products made of Aluminium 565.01 526.17 -6.87% 3618.22 3249.18 -10.2%
Copper and products made of copper 271.08 246.66 -9.01% 1187.07 1053.17 -11.28%
Lead and products made of Lead 76.25 64.4 -15.53% 308.18 421.53 36.78%
Nickel and products made of Nickel 14.08 15.15 7.61% 87.33 87.68 0.4%
Other Non Ferrous Metals and their products 62.38 78.46 25.78% 367.85 424.1 15.29%
Tin and products made of Tin 1.44 2.95 105.3% 7.97 11.3 41.72%
Zinc and products made of zinc 41.47 58 39.87% 390.18 347.34 -10.98%
Sub Total 1031.71 991.8 -4% 5966.8 5594.3 -6%

Source : DGCI&S

Table 4c. Trend in exports of Industrial Machinery

US$ Million

Product panels October-2023 October-2024 Growth April-October 2023-24 April-October 2024-25 Growth
Air condition and Refrigeration Machinery and Parts, Industrial Furnaces, Water heaters and Centrifuges and Compressor 145.11 170.43 17.44% 831.31 909.39 9.39%
IC Engines and Parts 316.39 324.03 2.41% 1852.05 1844.39 -0.41%
Industrial Machinery for dairy, agriculture, food processing, textiles, paper, chemicals, etc 672.49 701.88 4.37% 3976.53 4066.78 2.27%
Machine Tools 58.61 61.09 4.22% 365.14 392.75 7.56%
Machinery for ATMs, Injecting Moulding machinery, valves, etc 202.41 240.9 19.02% 1232.08 1361.01 10.46%
Nuclear Reactors, Industrial Boilers and Parts 65.01 89.15 37.13% 368.08 406.76 10.51%
Pumps of all types 110.14 136.23 23.68% 704.58 759.17 7.75%
Sub Total 1570.18 1723.71 9.78% 9329.77 9740.25 4.4%

Source : DGCI&S

Table 4d. Trend in exports of Electrical Machinery and Equipment

US$ Million

Product panels October-2023 October-2024 Growth April-October 2023-24 April-October 2024-25 Growth
Electric Machinery and Equipment 1054.87 1281.13 21.45% 6203.2 6975.32 12.45%

Source : DGCI&S

Table 4e. Trend in exports of Auto and auto parts

US$ Million

Product panels October-2023 October-2024 Growth April-October 2023-24 April-October 2024-25 Growth
AUTO COMPONENTS/PARTS 642.025 688.684 7.27% 3768.568 4089.741 8.52%
AUTO TYRES AND TUBES 226.942 256.807 13.16% 1366.722 1511.515 10.59%
Motor Vehicle/cars 762.562 788.897 3.45% 4270.925 4397.943 2.97%
Two and Three Wheelers 203.818 266.174 30.59% 1313.806 1545.374 17.63%
Sub Total 1835.348 2000.562 9% 10720.022 11544.573 7.69%

Source : DGCI&S

Table 4f. Trend in exports of aircraft, spacecraft and parts and ships, boats and floating structures

US$ Million

Product panels October-2023 October-2024 Growth April-October 2023-24 April-October 2024-25 Growth
Aircrafts, Spacecrafts and Parts 104.55 710.58 579.68% 676.7 2970.85 2741.64%
Ships, Boats and Floating Structures 467 169.72 -63.66% 2165.62 2171.11 364.9%
Sub Total 571.55 880.3 54.02% 2842.32 5141.96 80.91%

Source : DGCI&S

Table 4g. Trend in exports of other engineering products

US$ Million

Product panels October-2023 October-2024 Growth April-October 2023-24 April-October 2024-25 Growth
BICYCLE AND PARTS 30.53 32.67 7.02% 183.02 186.37 1.83%
Hand Tools, Cutting Tools and Implements made of Metals 80.06 89.18 11.4% 464.13 503.06 8.39%
Medical and Scientific Instruments 190.03 257.74 35.63% 1190.48 1337.69 12.37%
OFFICE EQUIPMENTS 19.43 22.26 14.59% 165.96 140.73 -15.2%
OTHER CONSTRUCTION MACHINERY 250.82 268.78 7.16% 1444.14 1526.76 5.72%
OTHER MISC. ITEMS 387.34 434.19 12.1% 2325.1 2515.18 8.18%
PRIME MICA AND MICA PRODUCTS 4.73 2.57 -45.77% 20.76 14.96 -27.92%
Railway Transport and Parts 23.35 22.23 -4.81% 148.78 153.67 3.29%
PROJECT GOODS 0.2 0.25 27.06% 1.95 1.15 -41.33%
OTHR RUBBER PRODCT EXCPT FOOTW 134.61 142.57 5.92% 821.13 875.15 6.58%

Source : DGCI&S

ENGINEERING PRODUCT PANELS – COUNTRY-WISE ANALYSIS

Table 5: Export of Different Panels

(US$ million)

Product panels Top 5 nations April-October 2023-24 April-October 2024-25 Growth (%)
Iron and Steel and Products made of Iron and Steel
U S A 1646.41 1647.12 0%
ITALY 1091.3 715.44 -34%
U ARAB EMTS 633.8 670.92 6%
U K 387.43 445.12 15%
NEPAL 546.61 406.81 -26%
Non-Ferrous Metals and Products made of Non-Ferrous Metals
U S A 724.91 710.06 -2%
KOREA RP 647.79 473.42 -27%
TURKEY 121.8 408.55 235%
SAUDI ARAB 545.14 345.23 -37%
CHINA P RP 205.52 305.09 48%
Industrial Machinery
U S A 1848.45 2045 11%
GERMANY 520.42 463.09 -11%
U ARAB EMTS 379.13 448.43 18%
CHINA P RP 360.89 424.66 18%
THAILAND 405.5 391.72 -3%
Electrical Machinery
U S A 1223.51 1352.57 11%
SINGAPORE 523.28 787.66 51%
U K 499.87 531.65 6%
GERMANY 366.32 430.08 17%
KOREA RP 200.88 361.41 80%
Automobiles
U S A 1199.15 1200.63 0%
MEXICO 794.9 991.25 25%
SAUDI ARAB 828.84 836.88 1%
SOUTH AFRICA 745.55 767.42 3%
U ARAB EMTS 414.58 524.69 27%
Aircrafts and Spacecraft parts and products
U ARAB EMTS 9.26 697.11 7429%
SAUDI ARAB 1.04 352.52 33656%
FRANCE 87.7 326.27 272%
U S A 227.52 214 -6%
TURKEY 44.92 189.94 323%
Ships Boats and Floating products and parts
U ARAB EMTS 485.69 737.63 52%
SINGAPORE 606.36 591.36 -2%
U S A 52.6 250.35 376%
INDONESIA 556.18 232.68 -58%
SRI LANKA DSR 175.32 104.62 -40%
Project Goods
KAZAKHSTAN 0 0.35 N/A
U S A 0.12 0.31 148%
BHUTAN 0.02 0.12 489%
CONGO P REP 0 0.06 N/A
NEPAL 0.03 0.05 56%
Other Rubber Product Except Footwear
U S A 183.26 201.72 10%
GERMANY 60.4 56.67 -6%
U ARAB EMTS 28.75 37.01 29%
CHINA P RP 29.25 31.64 8%
NETHERLAND 24.09 31.44 31%
Other engineering products
U S A 1424.47 1454.93 2%
GERMANY 287.88 315.63 10%
U K 294.3 311.08 6%
U ARAB EMTS 259.23 283.45 9%
SAUDI ARAB 203.43 212.25 4%

Source : DGCI&S

ENGINEERING EXPORTS – STATE-WISE ANALYSIS

State wise engineering export performance

The table below indicates the exports from top Indian states. It is evident from the table that almost 93 % of India’s exports is contributed by the listed 12 states. Within this almost 54.7 percent of exports is done by Maharashtra, Tamil Nadu and Gujarat together.

Table 6: Top state wise engineering export performance - April-September 2024-25

(US$ million)

Top States Cumulative Export April-September 2024-25 Share % Remark
Maharashtra 11155 22.89% 93.7% share covered by top 12 states
Tamil Nadu 8702.65 17.86%
Gujarat 7497.04 15.39%
Karnataka 3439.74 7.06%
Telangana 3228.76 6.63%
Odisha 2812.3 5.77%
Andhra Pradesh 2542.49 5.22%
Uttar Pradesh 2147.93 4.41%
West Bengal 1682.27 3.45%
Madhya Pradesh 942.22 1.93%
Rajasthan 757.42 1.55%
Haryana 749.12 1.54%
Daman & Diu And Dadra & Nagar Haveli 597.66 1.23%
Delhi 507.99 1.04%
Kerala 427.42 0.88%
Chhattisgarh 414.43 0.85%
Jharkhand 390.97 0.8%
Punjab 328.17 0.67%
Goa 184.65 0.38%
Puducherry 94.63 0.19%
Uttarakhand 42.67 0.09%
Bihar 33.49 0.07%
Himachal Pradesh 12.09 0.02%
Tripura 10.94 0.02%
Assam 9.57 0.02%
Chandigarh 7.61 0.02%
Arunachal Pradesh 1.61 0%
Jammu & Kashmir 1.27 0%
Manipur 0.56 0%
Sikkim 0.53 0%
Meghalaya 0.09 0%
Andaman & Nicobar 0.08 0%
Lakshadweep 0.06 0%
Ladakh 0 0%
Mizoram 0 0%
Nagaland 0 0%

Source : DGCI&S

Region wise engineering exports

In terms of region, western region which includes industrial states like Maharashtra and Gujarat is the front runner in terms of exports with 37.7 percent share. Tamil Nadu from the Southern Region has improved its export performance and it ranked second after Maharashtra, while Gujarat and Karnataka ranked third and fourth during April-June 2024-25.

Note : DGCI&S state wise data available till February-2024

Table 7: Region wise exports from India till February-2024

Value in US$ million

Region Jul-2023($Mn) Jul-2024($Mn) Growth % Apr-Jul 2023-24($Mn) Apr-Jul 2024-25 ($Mn) Growth %
WESTERN REGION 3235.41 3477.85 7.49% 20242.16 20376.57 0.66%
SOUTHERN REGION 3025.34 3323.9 9.87% 15987.11 18435.75 15.32%
EASTERN REGION 893.46 906.48 1.46% 6117.73 5356.31 -12.45%
NORTHERN REGION 1764.21 588.86 -66.62% 11187.05 4554.8 -59.29%
Grand Total 8918.42 8297.09 -6.97% 53534.05 48723.43 -8.99%

CORRELATION BETWEEN MANUFACTURING PRODUCTION AND ENGINEERING EXPORTS

Engineering sector is an important component of the broader manufacturing sector and the share of engineering production in overall manufacturing output is quite significant. As exports generally come from what is produced within a country, some correlation between manufacturing production growth and engineering export growth should exist. We briefly look at the trend in manufacturing growth as also engineering export growth to see if they move in tandem. It may be mentioned that manufacturing has 77.63% weightage in India’s industrial production.

Engineering export growth and manufacturing output growth moved in the same direction in as many as nine out of twelve months in each of the fiscal years 2019-20 and 2020-21. During fiscal 2021-22, engineering export growth and manufacturing growth moved in the same direction in seven out of twelve months while in each of fiscal 2022-23 and 2023-24, as many as 10 out of 12 months saw engineering exports and manufacturing output moved in the same direction.

The first two month of fiscal 2024-25 also saw manufacturing output growth and engineering exports growth moving in the same direction. April 2024 saw engineering exports declined from a growth in Mar 2024 and manufacturing output growth decelerated. The month of May 2024 witnessed just the opposite. Engineering exports bounced back to growth path and manufacturing output growth accelerated. June 2024 however saw both moved in the opposite direction with a higher growth in engineering exports and lower manufacturing growth.

The link between these two may not be established on a monthly basis, but a positive correlation may be seen if medium to long term trend is considered.

Table 8: Engineering exports growth vis-à-vis manufacturing growth from April 2020
Months/ Year Engg. Export Growth (%) Manufacturing Growth (%)
April 2020 -63.05 -66.6
May 2020 -22.17 -37.8
June 2020 -5.18 -17.0
July 2020 10.56 -11.4
August 2020 -7.01 -7.6
September 2020 4.09 0.4
October 2020 -5.01 4.5
November 2020 -8.37 -1.6
December 2020 -0.93 2.7
January 2021 16.66 -0.9
February 2021 -4.94 -3.4
March 2021 67.75 28.3
April 2021 236.85 196.0
May 2021 50.21 32.1
June 2021 51.00 13.2
July 2021 42.57 10.5
August 2021 58.63 11.1
September 2021 35.11 4.3
October 2021 51.76 3.3
November 2021 37.28 0.3
December 2021 47.42 0.6
January 2022 25.63 1.9
February 2022 35.49 0.2
March 2022 19.72 1.4
April 2022 18.30 5.6
May 2022 11.45 20.6
June 2022 3.01 13.0
July 2022 -0.03 3.2
August 2022 -12.64 -0.5
September 2022 -11.39 2.0
October 2022 -19.68 -5.8
November 2022 0.09 6.7
December 2022 -11.60 3.6
January 2023 -9.76 4.0
February 2023 -9.73 5.6
March 2023 -7.49 0.5
April 2023 -7.27 5.5
May 2023 -4.13 6.3
June 2023 -10.94 3.5
July 2023 -6.65 5.0
August 2023 7.83 9.3
September 2023 6.81 4.5
October 2023 7.20 N A
November 2023 -3.48 1.2
December 2023 9.82 4.5
January 2024 4.21 3.6
February 2024 15.9 5.0
March 2024 10.66 N A
April 2024 -4.49 3.9
May 2024 7.41 4.6
June 2024 10.27 N A
July 2024 3.66 4.6
August 2024 4.26 1.0
September 2024 9.44 3.9

Source :Department of Commerce and CSO

IMPACT OF EXCHANGE RATE ON INDIA’S EXPORTS

How did the exchange rate fare during July 2024 and what was the recent trend in Re-Dollar movement? In order to get a clearer picture of the recent Re-Dollar trend, not only we took the exchange rate of July 2024, but also considered monthly average exchange rate of Rupee vis-à-vis the US Dollar for each month of fiscal 2023-24 and 2024-25 till July 2024 as per the latest data published, as mere one-month figure does not reflect any trend. The following two tables clearly depicts the short-term trend:

Fig 3: Trend of Rupee vis-a-vis US dollar from April 2020

(Monthly Average Rate of FBIL has been considered)

Source : FBIL

Table 9: USD-INR monthly average exchange rate in 2024-25 vis-à-vis 2023-24

(As per latest data released by FBIL)

Monthly Average Exchange Rate (1 USD to INR) Year-on-Year Change (%) Direction Month-on-Month Change (%) Direction
Month 2023-24 2024-25
April 82.02 83.41 1.69 Depreciation 0.49 Depreciation
May 82.34 83.39 1.28 Depreciation -0.02 Appreciation
June 82.23 83.47 1.51 Depreciation 0.10 Depreciation
July 82.15 83.59 1.75 Depreciation 0.14 Depreciation
August 82.79 83.89 1.33 Depreciation 0.36 Depreciation
September 83.05 83.81 0.92 Depreciation -0.10 Depreciation
October 83.24 84.02 0.94 Depreciation 0.25 Depreciation

Rupee depreciation vis-à-vis the US Dollar continued in the new fiscal 2024-25 both on a year-on-year basis and on a month-on-month basis. Rupee hit record low of 83.74 during July 2024 on a daily closing basis. Outflow of funds from Indian capital market due to dollar demand by corporates amid global economic and geo political uncertainty, and strengthening of dollar at the same time in the international market due to tightening of US fed policy continued to weigh on several other major currencies including Rupee.

Table 10: USD-INR monthly average exchange rate in 2023-24 vis-à-vis 2022-23

(As per latest data released by FBIL)

Monthly Average Exchange Rate (1 USD to INR) Year-on-Year Change (%) Direction Month-on-Month Change (%) Direction
Month 2022-23 2023-24
Apr 76.17 82.02 7.68 Depreciation -0.33 Appreciation
May 77.32 82.34 6.49 Depreciation 0.39 Depreciation
Jun 78.04 82.23 5.37 Depreciation -0.13 Appreciation
Jul 79.60 82.15 3.20 Depreciation -0.10 Appreciation
Aug 80.23 83.04 3.50 Depreciation 0.78 Depreciation
Sep 80.23 83.04 3.50 Depreciation 0.30 Depreciation
Oct 82.34 83.24 1.09 Depreciation 0.24 Depreciation
Nov 81.81 83.30 1.82 Depreciation 0.07 Depreciation
Dec 82.46 83.28 0.99 Depreciation -0.02 Appreciation
Jan 81.90 83.12 1.49 Depreciation -0.19 Appreciation
Feb 82.61 82.96 0.42 Depreciation -0.19 Appreciation
Mar 82.29 83.00 0.86 Depreciation 0.05 Depreciation

Source : FBIL, EEPC Research

TREND IN ENGINEERING TRADE BALANCE

We now present the trend in two-way yearly trade for the engineering sector for the 2024-25 depicted in the table below:

Table 11: Monthly Trend in Engineering Trade Balance for the current FY

(US$ million)

Trade Flow Apr May June July August September October
Engineering Export 11034.8 10.0 9.4 9.0 9.4 9.8 11.2
Engineering Import 10985.6 12.9 12.0 12.5 14.1 12.7 13.4
Trade Balance -0.4 -2.9 -2.6 -3.5 -4.7 -2.9 -2.2

Source : DGCI&S

TO CONCLUDE...

India’s engineering exports continued its winning streak in the month of July by reaching USD 9.03 billion and recording a growth of 3.7%. In cumulative terms too, engineering exports grew by 4.2%. This result has been in contrast to the trend in overall merchandise exports which in July decline by more than 1% in the y-o-y terms. The performance was made possible by the exporting community despite facing a number of global challenges. It is also noted that the decline in iron and steel exports have been majorly responsible for muted performance of engineering exports from India. In July 2024, exports of iron and steel declined by around 27% and in cumulative terms around 32%. It is also noted that without the iron and steel sector, the growth in engineering exports would come to more than 7% in monthly terms and more than 9% in cumulative terms. The decline in iron and steel was majorly due to stiff competitive pricing from China, geopolitical conflicts in Europe and West Asia and protectionist policies in USA and EU. The situation in overall engineering exports is expected to improve in the future as Global forecasts for GDP growth remain at around 3% for 2024, with the short-term trade outlook being cautiously optimistic. If positive trends persist, global trade in 2024 could reach almost $32 trillion as per the recent UNCTAD update.

The recently announced Union Budget 2024-25 is expected to facilitate MSMEs and export finance significantly. The Budget has also promised rationalized BCDs for key inputs which would give further boost to engineering exports. The major issue that is affecting the exporting community is the rising protectionism across the globe. To maintain the rising trend in engineering exports, the exporting community urges the government to provide support in this matter.