Outlook for exports of engineering goods looks strong for rest of CY 2021

India’s engineering goods exports continued the uptrend and posted a 52.61 per cent increase in June 2021 over the same period last year

Topics

Engineering exports | Export | Merchandise exports

With export demand for engineering goods looking strong in the coming months of 2021, continued non-availability of shipping containers could play a bigger spoilsport than even the likely third wave of Covid-19.

“Freights have gone up three times and people are willing to pay as well but there is just no availability of containers. No one knows how to tackle the situation even though the export market looks robust,” Suranjan Gupta, executive director of Engineering Export Promotion Council (EEPC) of India told Business Standard.

As per preliminary official data, EEPC said India’s engineering goods exports continued the uptrend and posted a 52.61 per cent increase in June 2021 over the same period last year.

India’s merchandise exports in June 2021 was $32.46 billion, an increase of 47.34 per cent over $22.03 billion in June 2020 and an increase of 29.7 per cent over $25.03 billion in June 2019.

The issue with regard to shortage of shipping containers has started since January 2021, since India’s exports started to pick up. Over the months, however, situation has not changed and in fact worsened, said industry officials.

“There is serious shortage of containers on the eastern coast of India. Now the only option looks like is to speak to shipping lines to get commitment from them for these containers,” said Gupta.

Though the second wave of Covid-19 is receding, a likely third wave is not expected to hit trade as it did in the first two waves, said industry experts.

“Governments both state and centre are much better prepared for the third wave than they were for the first two. In anticipation of the third wave, governments are taking precautionary measures already and also keeping separate wards for kids in hospitals as this wave is expected to affect younger population. Due to better preparedness, we do not see business operations getting impacted this time,” said an exporter on condition of anonymity.

Products such as auto components, hand tools, medical devices were part of engineering exports.

Requirement for these products was strong from Europe, US, Saudi Arabia and United Arab Emirates among others since last few months.

The demand that spiked for engineering goods recently was a combination of pent up demand as well as increased usage of these goods since economies are opening up and getting back onto their feet after the second wave, said another EEPC official.

The first two waves of Covid-19 gave rise to sizeable manpower issues over the last one-and-half year as the first wave brought all operations to a standstill, while the second wave led to increased death cases.

Increased vaccination in coming months should sort out manpower issue to some extent and as far as export volumes are concerned, the pick up will also look strong since it will be on a relatively lower base,” said Gupta.

EEPC India is a trade and investment promotion organisation sponsored by the Ministry of Commerce & Industry, Government of India, and caters to the Indian engineering sector.

As an advisory body it actively contributes to the policies of the Government of India and acts as an interface between the engineering industry and the government. Currently, EEPC India has a membership base of over 12,000 out of which 60 percent are small-and-medium enterprises.

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