Outbound shipments of engineering products in June to these nations doubled to $1.32 billion in June 2020, from $653.52 million in June 2019.
Rising iron and steel exports to China, Vietnam, and Taiwan arrested the decline in outbound shipments of engineering products in June, on a year-on-year (YoY) basis, vis-à-vis April and May, shows an analysis by an industry body.
There was an overall decline, nevertheless, on account of shrinking exports of high-value items like consumer durables.
According to EEPC India, iron and steel exports to these nations doubled to $1.32 billion in June 2020, from $653.52 million in June 2019.
A bulk of the exports went to these three countries.
Exports of iron and steel to China surged over 1,400 per cent to $524 million in June 2020, from a mere $35 million in June 2019. Shipments to Vietnam jumped over 700 per cent to $183 million from $22 million, while those to Taiwan rose 218 per cent from $11 million to $35 million. This gave a breather to declining engineering exports.
Exports of these products shrank 7.24 per cent in June YoY, compared to a 24 per cent fall in May and 64 per cent plunge in April. Overall, exports of engineering products in June stood at $6 billion, against $6.5 billion in June last year.
Sharp contraction in exports of high value-added products, such as industrial machinery, auto components, air conditioners, refrigerators, and machine tools caused the decline in exports. In some areas, such as railway transport, exports nosedived as much as 83 per cent.
Of the 33 engineering export items tracked in the analysis, 27 recorded negative YoY growth in June 2020, while all six positive entries were related to metals -- with iron and steel topping the table.
Non-ferrous metals witnessed growth of over 30 per cent. These included copper, aluminium, zinc, and nickel.
Erosion was sharp for the rest of the engineering items. “India’s export of raw material and low value-added intermediate products rose, 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 upgradation, and R&D in the same,” said EEPC India Chairman Mahesh Desai.
Desai said that as most of India’s engineering sector comprises MSMEs that do not have access to capital or technology, the government should extend further help to them.