Indian engineering exports continued its growth run for the sixth straight month to October 2024 and this time the growth was at an unprecedented high of 38.5 perecnt over Oct 2023 driven by exceptionally high growth in exports of Aircraft, spacecraft and parts; and Ships, boats and floating structures. For the first time in fiscal 2024-25, Indian engineering exprts crossed USD 10 billion mark and stood at its highest of this fiscal. Exports of Iron and steel turned positive for the first time in fiscal 2024-25 while Electric machinery, Industrial machinery and automobile also supported this high growth of overall engineering exports by showing noticeable increase in exports.Cumulative exports during Apr-Oct 2024-25 also recorded 8.27 percent growth over the same period last fiscal. Share of engineering in overall merchandise exports was at an impressive 28.72 percent in October 2024 and at 26.75 percent on a cumulative basis.
Trade Flow | Export figures(in $ billion) | Growth (%) | ||||
---|---|---|---|---|---|---|
Oct-2023 | Oct-2024 | Apr-Oct 2023-24 | Apr-Oct 2024-25 | Oct-2024 over Oct-2023 | Apr-Oct 2023-24 over Apr-Oct 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
Excluding the export of iron and steel, engineering exports recorded a higher growth both on a monthly as well as cumulative basis as shown in the table above. Exports of Iron and Steel however secured 29.4 percent year-on-year growth in October 2024 but contimued to decline on a cumulative basis and dropped by 20.91 percent year-on-year during April-October 2024-25.
Trade Flow | Export in Oct-2023 | Export in Oct-2024 | Growth (%) | Exports in Apr-Oct 2023-24 | Exports in Apr-Oct 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
The monthly engineering figures for 2024-25 vis-à-vis 2023-24 are shown below as per the latest DGCI&S estimates:
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
We now look at the export scenario of the top 25 nations that had highest demand for Indian engineering products during October 2024 over October 2023 as well as in cumulative terms during April-October 2024-25 vis-à-vis April-October 2023-24. The data clearly shows that top 25 countries contribute 75.8% of total engineering exports.
(US$ million)
Countries | Oct-2023 | Oct-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
The following table depicts region wise India’s engineering exports for April-October 2024 as compared to April-October 2023.
(US$ million)
Regions | Oct-2023 | Oct-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.
In this section we look at the Engineering Panel wise exports for the month of October 2024 vis-à-vis October 2023 as well as the cumulative exports for April-October 2024-25 vis-à-vis April-October 2023-24. These are indicated in the tables below.
(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
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
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
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
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
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
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
Reasons for Decline (As per April-Septepber 2024-25):
a)During April-October 2024-25, India’s exports of Iron and Steel deteriorated by 21% vis-à-vis same period last fiscal, while Products of Iron and Steel witnessed growth to the extent of 1% during the same period, after continuous decline for many months.
b)Indian steel HRC exports remained sluggish this week as global market sentiments weakened further. Indian offers to the Middle East (ME) remained largely stable amid competitive quotes from China. Furthermore, a recent deal between China and the Middle East further pressured Indian exports. In contrast, European offers continue to be affected by weak regional demand.
c)India’s HRC offer to Middle East: Indian HRC export prices to the Middle East (ME) continued to remain stable for the week at $560/t CFR, as per sources. Chinese HRC export prices to the Middle East fell by $10/t w-o-w to $520-525/t CFR UAE against $530-535/t CFR UAE last week amid active trade.
d)India’s HRC offer to EU: India's HRC export offers to Europe (S275, 3mm) continued to remain range-bounded at $590-595/t CFR Antwerp ($540-545/t FOB, east coast India). Indian steel mills' export offers failed to gain traction in the European market due to high prices relative to domestic rates and EU trade restrictions. The unfavourable US dollar-euro exchange rate further increased import costs. In the EU, domestic HRC prices remained flat amid sluggish trading, with market participants uncertain about the market's direction for Q1CY'25.
e)Overall outlook: Chinese steelmakers continue to be highly competitive, offering lower prices and actively seeking export markets. This poses a significant challenge for Indian exporters. The global economic outlook remains sluggish, with geopolitical tensions contributing to concerns about overall steel demand and potential impacts on Indian exports.
a)Copper exports have increased in October 2024 by 26%. If this trend continues, we will see a revival in copper exports for the fiscal 2024-25
b)The 6% decline in cumulative terms can be attributed to the declineing copper exports in the previous months
c)The decline was a result of
a) Aluminium exports have increased in October 2024 by 17%. If this trend continues, we will see a revival in Aluminium exports for the fiscal 2024-25
The 7% decline in cumulative terms can be attributed to the declineing Aluminium exports in the previous months
The decline was a result of
The Indian aluminium exports also face discrimination in market access in ASEAN countries and even our neighbouring markets: In the ASEAN region, countries like Malaysia have imposed high Most Favoured Nation (MFN) duties ranging from 25% to 30% on tariff lines between 7604 to 7608, severely limiting exports from India’s downstream aluminium industry, which predominantly comprises MSMEs. Similarly, Indonesia has placed downstream aluminium products under the Sensitive Track, further restricting market access.
India’s aluminium exports also face discriminatory practices in neighbouring countries such as Bangladesh. In April 2023, Bangladesh reclassified aluminium billets under HS code 76012090 to 76012000, removing them from the South Asian Free Trade Area (SAFTA) agreement and imposing a 5% Basic Customs Duty (BCD) on imports from India. This change has increased the cost of exporting aluminium billets to Bangladesh, affecting trade volumes.
Zinc exports have increased in October 2024 by 31%. If this trend continues, we will see a revival in zinc exports for the fiscal 2024-25. The culuative decline can be attributed mainly to the rising demand for Zinc in the domestic market.
(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
State wise engineering export performance
The table below indicates the exports from top Indian states. It is evident from the table that almost 93.7 % of India’s exports is contributed by the listed 12 states. Within this almost 56.1 percent of exports is done by Maharashtra, Tamil Nadu and Gujarat together.
(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% | |
Nagaland | 0 | 0% | |
Ladakh | 0 | 0% | |
Mizoram | 0 | 0% |
Source : DGCI&S
In terms of region, western region which includes industrial states like Maharashtra and Gujarat is the front runner in terms of exports with 38.3 percent share. Tamil Nadu from the Southern Region has retained its export performance and it ranked second after Maharashtra, while Gujarat and Karnataka ranked third and fourth during April-September 2024-25.
Note : DGCI&S state wise data available till February-2024
Value in US$ million
Region | Oct-2023($Mn) | Oct-2024($Mn) | Growth % | Apr-Oct 2023-24($Mn) | Apr-Oct 2024-25 ($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% |
Engineering forms a considerable part 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. Then June, July and August 2024 however saw both moved in the opposite direction. June and August 2024 saw higher engineering export growth but lower manufacturing growth in comparison to the previous month while July 2024 just witnessed the reverse. September 2024 again saw both moving in the same direction by securing higher 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.
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
How did the exchange rate fare during October 2024 and what was the recent trend in ReDollar movement? In order to get a clearer picture of the recent Re-Dollar trend, not only we took the exchange rate of October 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 October 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:
(Monthly Average Rate of FBIL has been considered)
Source : FBIL
(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 on a yearon-year basis and again depreciated on a month-on-month basis in October 2024. Rupee remained under pressure through most of the month due to appreciation of USD over the month, coupled with equity outflows by foreign portfolio investors from Indian stock market and strong dollar demand from local importers. Geopolitical tensions in the Middle East, and worries over recession in the US also weighed on rupee. US dollar strengthened due to rising uncertainties around just concluded US presidential election, along with a reduced likelihood of interest rate cuts by the Federal Reserve.
(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
We now present the trend in two-way yearly trade for the engineering sector for the 2024-25 depicted in the table below:
(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
The Indian engineering exports recorded another remarkable performance for the 6th month in the current fiscal with a Y-o-Y growth of 38.5% in October 2024 and 8.2% in April-October 2024. It needs to be mentioned here that after a considerable number of months, October 2024 also recorded positive growth in exports of ferrous and non-ferrous metals including iron and steel, copper, aluminium and zinc which otherwise recorded negative growth in the previous months. This performance despite the growing global uncertainties and shifting trade policies is commendable.
In its latest Global Trade Outlook and Statistics (October 2024), WTO revised its forecast for global merchandise trade for 2024 to 2.7% which is slightly better than the previous 2.6%. The update for 2025 however is revised down to 3% from the previous 3.3%. The growth is trade will be mainly contributed by the rising demand in ASEAN countries rather than the West. The WTO further mentions the current trade trend has indicated rising trade volume and flate trade values – an incation towards decline in export and import prices. The WTO expects that lower inflation will boost consumer spending, while lower interest rates should raise investment spending by firms. The risks to merchandise trade mainly remains similar to previous months including geopolitical tensions, regional conflicts and policy uncertainty.
The results and the recent WTO updates indicates the existing volatility of the global markets and the engineering industry’s performance will depend on the intitiaves of both the industry and the government.