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Engineering exports rise 5% YoY to $25.98 billion in Q3 of FY24, December shipments cross $10 billion

Ongoing shipping crisis in Red Sea, high prices of metals and container shortages among key challenges facing the engineering exports sector: EEPC India Chairman

New Delhi :- National, Driven primarily by higher shipments of iron & steel and improvement in demand from some key markets, India’s engineering exports rose 4.91% year-on-year to US$ 25.98 billion in the October-December quarter (Q3) of the current financial year 2023-24.

Engineering goods worth US$ 24.76 billion had been exported in the corresponding quarter of 2022-23.

After a year-on-year decline in November 2023, engineering exports from India came back to a growth path once again with a record high monthly shipment in 2023-24 at US$ 10.04 billion in December 2023. For the first time in fiscal 2023-24, Indian engineering exports crossed US$ 10 billion.

“After a dip in November 2023, India’s engineering exports made a strong comeback with a 10.19% increase in December 2023 compared to the previous year. This is good news considering the tough global and local conditions,” said EEPC India Chairman Mr Arun Kumar Garodia.

He, however, pointed out that things were not looking great as yet on the global front.

The latest UNCTAD Global Trade Update reveals a $2 trillion drop in global trade in goods in 2023, with developing countries contributing significantly to this decline. The report also warns about an uncertain outlook for 2024, with a generally negative mood among global exporters.

Mr Garodia noted that the ongoing shipping crisis, especially in the Red Sea region, is also causing a lot of issues.

“There is also a shortage of containers, and shipping lines, facing capacity issues, are raising prices and adding extra charges during busy times. Many member exporters have reported lower profit margins, leading to holding back on orders until things improve. The exporting community is worried that exports might decrease in the coming months because of these challenges,” he said.

The decline in cumulative engineering exports narrowed down to 0.44% with the growth achieved in December 2023. It was recorded at US$ 79.51 billion during April-December 2023-24 as against US$ 79.86 billion during the same fiscal period.

The share of engineering exports in India’s total merchandise exports went up to 23.93% in December 2023 from 23.17% in November 2023.

On a cumulative basis, the share was recorded at 25.07% during April-December 2023-24.

In December 2023, 19 out of 34 engineering panels saw positive year-on-year growth, while 15 panels, including products of iron and steel, aluminium and zinc, and certain industrial machinery, experienced negative export growth.

Excluding iron and steel, engineering exports recorded a lower 8.91% y-o-y growth during December 2023 as exports of iron and steel grew year-on-year in December 2023.

On a cumulative basis, 15 out of 34 engineering panels recorded negative growth during April-December 2023-24.

Among top exporting destinations, exports to EU countries such as Italy and WANA (West Asia and North Africa) countries such as UAE and Saudi Arabia increased during December 2023. Exports also increased to South Korea, China, Japan and Australia.

Significantly, engineering exports to China grew by double-digit in December 2023. Engineering shipments to China rose 12% year-on-year to US$ 261.6 million in December 2023.

Demand for engineering items from the US, however, remained subdued with shipments down by 1% year-on-year to US$ 1.57 billion in December 2023. On a cumulative basis, engineering shipments to the US declined 10% year-on-year to US$ 13.03 billion in April-December period of 2023-24.

Shipments to Russia continued the upward trend and recorded 88% year-on-year growth in December 2023. On a cumulative basis, engineering exports to Russia grew 130% to US$ 1.03 billion in the April-December period of 2023-24.

Region-wide data showed engineering exports to North America declined 1% year-on-year to US$ 1.96 billion in December 2023. Shipments to the European Union (EU), however, recorded 14% year-on-year growth at US$ 1.76 billion during this period.

Engineering exports to North East Asia and CIS countries were also positive in December 2023.

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