Bengaluru, NFAPost: In a pandemic- hit global trade, a sharp slide in India’s engineering exports in April and May this fiscal was checked to 7.24% decline in June, 2020 owing largely to doubling of iron and steel exports with most shipments sailing to China, Vietnam and Taiwan, an EEPC India analysis has shown.
Out of 33 engineering export items tracked in the analysis, 27 recorded negative year-on-year growth in June, 2020 while all the six positive entries related to metals, with iron and steel being on top of the table.
Level of arrest of degrowth of overall engineering exports in June came on the back of a severe drop of 64 per cent in April amidst near-global lockdown and 24 per cent decline in May, 2020.
The credit for the check in slide goes to a smart recovery in iron and steel and other metals. Iron and steel recorded more than 100% growth in exports during June 2020 with shipments of $1.32 billion against $653.52 million in the same month last year.
Value added items
Non-ferrous metals witnessed growth of over 30%. These included copper, aluminium, zinc and nickel. But iron and steel took the lion’s share, largely headed to China ,Vietnam and Taiwan.
Exports of iron and steel Increased to China by over 1400% to $524 million in June, 2020 from mere $35 million in the same month last year. These shipments to Vietnam went up by over 700% to $183 million from $22 million. To Taiwan, the increase was from $11 million to $35 million.
EEPC India Chairman Mahesh Desai said as for the rest of the engineering items, the erosion has been sharp during this period.
“India’s export of raw materials and low value added intermediate products increased while high value-added exports continued to dwindle. To reverse this trend in favour of high value-added exports, the government needs to identify those sectors and promote investment, technology up-gradation and R&D in the same, ” said EEPC India Chairman Mahesh Desai.
EEPC India Chairman Mahesh Desai said as most of India’s engineering sector comprises MSMEs which do not have access to capital or technology, the government should extend them further help, even as some laudable measures have been initiated.
When it comes to value-added products, the EEPC India analysis showed sharp decline in exports of industrial machinery, auto components, air-condition and refrigerators, machine tools and host of other items. The drop in exports value went up to 83 per cent in some cases, like railway transport.
