Engineering exports have had a mixed fortune; Trade with Russia increases: EEPC

India’s machinery exports to key markets like the United States, European Union (EU) and China continued to decline in June 2023, reflecting a challenging global trade environment, EEPC India said.

However, the country’s shipments to West Asia and North Africa (WANA), Northeast Asia and the CIS countries saw positive growth over the same period, the Engineering Exports Promotion Council of India (EEPC) said.

India’s machinery exports fell for the third straight month in June 2023, falling 11 percent year-on-year to US$8.53 billion.

The decline was due to a sharp drop in exports to the US, EU and China, it said.

Exports to the US fell 12.5 percent to $1.45 billion, while exports to the EU fell 16.2 percent to $1.51 billion. Exports to China fell 20 percent to $184 million. However, engineering exports to Russia almost tripled, reaching a whopping $116.9 million in June 2023.

Overall, exports to Russia in the April-June period of the current fiscal year recorded a remarkable four-fold increase, totaling $337.4 million compared to $89.7 million in the same period of the previous fiscal year.

Experts pointed out that the metals sector, particularly steel, played a key role in the downturn due to flagging global demand. Global steel demand was reported to have weakened further due to slower decline in China’s construction sector.

“It is the metals sector that has contributed most to the decline. This is a consequence of weakening global demand. The latest news suggests that global steel demand has continued to weaken due to slowing offtake from the Chinese construction sector,” said Arun Kumar Garodia, Chairman of EEPC India.

Excluding the export of iron and steel, machinery exports recorded a smaller 6.95 percent year-on-year decline in June 2023.

While 17 out of 34 engineering segments recorded positive year-on-year growth in June 2023, the remaining 17 segments recorded negative export growth.

Major engineering products such as iron and steel, most non-ferrous products (except copper, nickel and lead products), industrial machinery and parts, bicycles and tricycles, auto components and parts, auto tyres, rail transport and hand tools recorded decreases in exports in June 2023 compared to June 2022.

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