Engineering exports likely to fall by 14% in FY’16: EEPC
Embattled with global slowdown, India’s engineering goods exports are expected to be confined to $60-62 billion during the current fiscal, up to 14.28 % less than $70 billion recorded last year, export promotion body EEPC India has said. Indian exporters have been battling the global slowdown, marked by sharp erosion in commodity prices leaving a negative outlook for the shipments of engineering goods, the EEPC said and the shipments “may be confined to $60-62 billion for the current fiscal despite 7-8% depreciation in rupee against dollar.” The export promotion council gauged the level of crisis in exports based on the November data, according to which, as many as 26 out of 33 engineering segments showed a negative trend. Engineering exports for April –November period of the current fiscal have seen a big drop of 14.4% to reach $39.85 billion from the level of $46.55 billion during the same period last year. “There is no question of engineering sector reaching the last year’s level of $70 billion in FY’16. We may end up the year with shipments around $60-62 billion with a hope that things start changing for better in the next financial year,” said T S Bhasin, Chairman, EEPC India. Major segments like iron and steel along with all non-ferrous metals and products that have maximum contribution to the engineering export basket saw a real blood bath in the export market, leaving absolutely no pricing power with the producers of suppliers, he added. Exports of these segments fell by more than 28% in November 2015 vis-à-vis the shipment value of November 2014. For the April-November cumulative period, the aggregate drop in these two areas has been over 25%, said EEPC. Another segment that has seen negative growth during the year is railways transport, registering up to 44% decrease during the April-November period. Be it auto and auto components, air conditioners and refrigerators or medical or scientific instruments, there has been a sharp fall in the export consignments, dealing a deadly blow to the engineering sectors, the EEPC said. It also blamed the government’s move to impose safeguard duty and anti-dumping duty on steel imports for the slide in engineering exports. “The situation has been worsened by excessive protection given by the government to the domestic large scale steel firms by way of safeguard duty, anti-dumping duty. There is also a proposal to fix a minimum import price. All these measures are lopsided and overlook interest of the small and medium enterprises which are then made to buy their raw material at higher costs losing competitive edge in the tough international market,” the EEPC India said. Of the top 25 export destinations of Indian engineering goods, 20 countries recorded negative growth in the first eight months of the current financial year. The growth rate in the top 25 countries during April- November recorded fall in exports by 14.1%. India’s merchandise exports have been falling for the past 12 months with November witnessing one of the worst performances with 29% drop. During April-November, India’s total merchandise exports declined by 18.46% to $174.31 billion from $213 billion registered during the same period a year ago.
December 29, 2015 | 04:20pm IST