Engineering exports decline on slowdown in China demand: EEPC

23 Sep 2015 Evaluate

A sharp decline in demand for base metals and commodities from china has impacted exports of India’s engineering products to the neighboring country as per data compiled by Engineering Export Promotion Council of India (EEPC). The country’s engineering exports to China plunged by 38 per cent in August. Engineering products, which have been effected by demand slowdown in China include steel, iron, non-ferrous metals, industrial machinery, auto components and bicycle parts. Further, Chinese Yuan devaluation has also added dent in the competitiveness of Indian exports.

EEPC report further highlighted that the exports of engineering products, one of the essential groups of exported items from India sharing 21.15 percent in August 2015 on India’s total merchandise exports, registered a negative growth of 29.5 percent growth rate to $4.49 billion compared to $6.38 billion in same period previous fiscal. Though the exports figures bounced back positively in July after consecutive negative growth in the first three months of the new fiscal, the August figures considerably marked a sharp decline by 29 percent. While, the cumulative value of engineering exports recorded a dip by over 10 percent to $26 billion in the current fiscal 2015-2016 from $ 8.8 billion the same period last year.

Out of 33 engineering panels, 24 panels (72 percent) of the engineering panels recorded a negative growth and remaining 9 panels fared positive growth in the month of August 2015. Products of Iron and Steel have dropped by 21.5 percent in august 2015 over august 2014, which is more than the cumulative fall during April- August 2015 compared to April-August 2014. Aircraft and spacecrafts, Ships, boats and floating products registered a drastic fall in growth rates by 78 percent and 99.6 percent respectively in August 2015 over August 2014.All non ferrous metals and products barring Nickel and Zinc products witnessed deterioration in exports during August 2015 against same period last fiscal. The highest decline is seen in the exports of Copper and products falling by 32 percent during August 2015 over same period last year, followed by Aluminium and Tin products falling by 18 percent during August 2015.

Among the Industrial Machinery panel, products like IC engines, Pumps and valves, Air condition repair machinery, Machine tools and others witnessed decline in growth rates. The Industrial Machinery as whole declined sharply by 15.3 percent during the said period. Other panels like, accumulator and batteries, nuclear reactors, nickel and zinc products from Non ferrous panel and Cranes and winches registered positive growth against the same period last year.

Further the exports to UK, Italy and Turkey too recorded negative growth during August and the April-August period. For August, even the US, which is perceived to be showing an economic recovery, saw a 13.5% fall in imports of engineering goods from India. India's engineering exports to 21 countries fell in August, while just four - Singapore, Germany, Malaysia and the Netherlands - posted an increase. On top of the falling demand, the government's decision to give protection to the domestic steel manufacturers via safeguard duty and other support measures too has impacted the user industries and thereby exports.

Engineering exports decline on slowdown in China demand: EEPC

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