Engineering exports continued to grow in 2026-27 after achieving record high in 2025-26

The following table depicts region wise India’s engineering exports for April-July 2026 as compared to April-July 2025

Note: Myanmar has been included in ASEAN and not in South Asia, since ASEAN is a formal economic grouping.

Regional observations:

• · In July 2026, India’s exports grew to almost all destinations barring Saudi Arabia (-12.1%), Thailand (-9.1%) and Turkey (-5.6%)
• · In Saudi Arabia, the logistics crisis in an around the Hormuz strait has affect India’s exports significantly. Furthermore most of Saudi Arabia’s engineering imports are project linked and the ongoing conflict in the region has affected some projects and Saudi Arabia’s purchasing activity has weekened in the recent times
• · In Thailand, the decline is mainly in IC engines and parts which can be explained by Thailand’s consistent shift towards electric vehicles. Furthermore growing competition from RCEP members and increasing cost of compliance for Indian exporters exporting under AIFTA can also have some impact on India’s exports to the region

In case of Turkey while exports have come down the postitive thing is that, the decline was in double digits a few months ago which has now come down significantly  

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We now analyze the performance of some of the important products for the fiscal April-July 2026 vis-à-vis April-July 2025. We have taken the major panels and computed the top importers to get an idea of the current trade pattern.

•  In April-July 2026, USA, Nepal and Italy ranked as the top importers of Indian Iron and Steel, while the USA, UAE and Germany lead in import of products of Iron & Steel.

•  The USA stood out as the primary importer of Indian 'Industrial machinery,' making up 22% of India's global exports in this category, followed by China and Germany with 5% ad 4% shares, respectively.

•  South Africa, Mexico and Saudi Arab were top importers of India's Automobiles during April-July 2026 in India’s global exports respectively over the same period previous fiscal.  

• USA, China, South Korea and Saudi Arab were the top importers of India's Non-ferrous metals and products during April-July 2026. 

• USA, Singapore  and UK were the top importers of Indian Electrical Machinery & Components during the same period with  18%, 11% and 8% shares, respectively. 

•  USA, France, Maldives, UK and Germany were the top importers of India's Aircrafts and Spacecraft during April-July 2026, making up to 71% of India’s total export of Aircrafts and Spacecraft. 

•  UAE, Singapore and Sri Lanka became the largest importer of ships, boats and floating structures during April- July 2026 in India’s global exports respectively over the same period previous fiscal. 

•  For the auto components’ product group, USA remained the top importer in April-July 2026 followed by Germany, Brazil, Mexico and Bangladesh.

Source : DGCI&S

India’s state-wise engineering exports during April-July 2026-27 reflect robust growth with significant contributions from western and southern states.

Maharashtra remained the largest engineering exporting state, with exports rising to US$ 9.0 billion, accounting for 19% of India’s total engineering exports, although growth was relatively moderate at 7%. Gujarat emerged as one of the strongest growth drivers among the top exporting states, with exports surging 36% to US$ 7.2 billion, capturing a 16% share. Tamil Nadu retained its position as the third-largest exporter, registering 7% growth to US$ 7.18 billion and contributing 15% to the country's engineering exports. Karnataka and Odisha also recorded impressive growth of 32% and 69%, respectively, highlighting the increasing diversification of India’s engineering export base. Haryana maintained its strong position with exports growing by 12% to US$ 3.16 billion, while Delhi recorded a notable 25% increase in exports. Among the emerging contributors, Uttarakhand posted the highest growth rate among major exporting states, with exports more than doubling by 131% during the period.

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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. In 2024-25, both moved in the same direction in eight out of 12 months and in 2025-26, both engineering export growth and manufacturing growth moved in the same direction in seven out of 12 months.

The first month of fiscal 2026-27 saw manufacturing output growth (new series with base year 2022-23) engineering export growth and moved in the same direction with both securing higher growth over the previous month. May and June 2026, however witnessed both of them moving in the opposite direction. While May 2026 saw higher engineering export growth but moderated manufacturiong output growth, June 2026 witnessed just the reverse.

The link between these two may not be established in one or two months, but a positive correlation may be seen if medium to long term trend is considered.