International environment hurting engineering exports
Exports by India fell by 2% from US$ 20.46 billion in the previous fiscal to US$ 20.08 billion for the first three months of this fiscal (FY 2019-20). In FY19, engineering exports amounted to approximately US$ 81 billion. This dip has been attributed to a string of factors including protectionist measures in Europe, rupee appreciation, sanctions on Iran and ambiguity over trade relations with the United States. At the domestic front, high domestic steel prices may also impact the industry.
About 25% of the country’s total merchandise exports are made up of engineering goods. The indicative figures for the month of June suggest that there has been a 7% fall in the export of engineering goods. According to Ravi Sehgal, Chairman, EEPC India, this is a worrying development since the period between July-September is said to be the peak season for exports of engineering goods. Despite these signs of alarm, Sehgal is optimistic that engineering exports may grow by 5-6% in FY20 if the currency stabilises, global scenario improves and the government intervenes.