Demand slump in neighbouring countries hits India’s engineering exports
India’s engineering exports has been witnessing a steep fall in the last couple of months mainly due to the demand slowdown in the neighbouring countries. As per the latest data released by the government on Thursday, India’s exports of engineering products registered a negative growth of 22.81% in September this year compared to the figure of the same month a year ago. However, the rate of decline was less than that of August when it went down by 29.5% year-on-year. In a recent analysis based on August trade data, engineering export promotion body EEPC India said that the country’s shipments to neighbouring markets including China and Sri Lanka have witnessed a massive fall. “India’s engineering exports to its neighbouring countries, including China have seen a massive fall in August, 2015 clearly signaling the demand slowdown getting all the more pervasive which could get into a spiral mode,” the EEPC analysis said. Major export items under the engineering sector such as steel, non-ferrous metals, industrial machinery, transport equipment and aircraft spare parts saw a sharp fall of 42.9% to China. Shipment of these items to China reduced to $153.2 million in August this year from $268.3 million during the same month last year. Exports to Sri Lanka and Nepal also witnessed similar trends during the period. “Sri Lanka which had in the recent few years been providing a sizeable base for the engineering items, has witnessed a massive plunge of 74.4% to $126 million from $496 million for the comparable period,” the EEPC said. Shipments to Nepal dropped by 26.6% to reach $96.1 million from the level of $130.9 million in August last year. India’s shipment of engineering goods to these countries had picked up only recently. However, experts say that the prevailing slowdown in the global market has eroded India’s advantage of gaining larger market share in its neighbouring countries. “Ironically, under the global demand slowdown impact, these markets are drying up fast, requiring urgent intervention from the government. The government may consider special dispensation for promoting exports to these countries, as a matter of priority,” EEPC India Chairman Anupam Shah said. The analysis also shows that out of the top 25 countries, 21 export destinations recorded negative growth in August 2015. “China once again recorded drop in exports by 43% in August 2015 compared to the previous fiscal. The devaluation of Chinese yuan has further created a dent in the competitiveness of Indian exports,” the report added.
October 17, 2015 | 2:06pm IST.