India’s engineering exports to China declined nearly 50% to $310 million in the month of October against $612 million in the same month of previous year due to the prevailing slowdown in China’s economy. Further, the total exports of iron and steel, which mainly moved to China, went down by 18% to $704 million in October 2014 from $858 million Engineering exports include transport equipment, capital goods, other machinery/equipment and light engineering products like castings, forgings and fasteners. Exports of total engineering products declined by 9.36% y-o-y to $5.03 billion in October 2014.
Further, the recession in European countries has been also impacting domestic engineering overseas shipments. The consignments to UK were down by 29% to $169 million in October 2014 from $238 million a year ago. Likewise, shipments to Italy were down 22% to $127 million from $163 million and for Germany, exports of engineering items went down by over 4% to $163 million from $171 million. However, owing to better performance in the previous months, the cumulative value of engineering exports recorded a positive growth of 18.46% in the first seven months of the current fiscal over the same period last fiscal.
As engineering sector accounts for around 20% of total exports, the impact of slowdown of the Chinese economy was clearly evident on country’s total exports. India’s total export declined by 5% to $26 billion in October from $27 billion in October 2013. On the other hand, country’s imports increased by 3.62% y-o-y to $39.45 billion in the reported month. With the surge in imports and reducing overseas shipments, trade deficit also increased to $13.35 billion from $l0.59 billion.
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