India’s engineering goods exports faced a decline of 4.57% YoY to $107.04 billion in FY23, despite the US remaining the top destination with a total shipment value recording 6.8% YoY growth to $18.67 billion. The UK, Germany, Singapore, Saudi Arabia, Mexico, and Indonesia also registered positive growth, while exports to China dropped by 52.4% YoY to $2.63 billion. Other markets that recorded negative growth included UAE, Turkey, and Thailand.
Factors responsible for the decline in engineering exports from India include the geopolitical crisis in the CIS region led by the Russia-Ukraine war, the economic slowdown in North-East Asia, especially China, the crisis in South-East Asia, and the slowdown in Europe. The decline was mainly due to depressed global demand, particularly in the metal sector.

Panel-wise analysis showed that out of 34 engineering panels, 22 recorded growth in exports during FY23 while 12 conceded a decline in shipment. Iron and steel were the main spoilsports behind the decline in engineering exports with a 41.52% decline in exports during FY23 over the previous fiscal. Excluding the iron and steel panel, engineering exports in FY23 recorded 4.91% growth over the previous fiscal.

EEPC India Chairman Arun Kumar Garodia stated that the decline could have been sharper if timely government measures had not been taken. The launch of the Foreign Trade Policy 2023, which includes all important aspects of trade, export incentives, and infrastructure and logistics, has had a catalytic effect on the industry.