Singapore now India's top market for engineering exports

Singapore replaced the United States as India's biggest overseas market for engineering parts in April, with exports rising 95 per cent to US$553 million from a year earlier, India's Engineering Export Promotion Council (EEPC) said on Wednesday.

India's overall engineering exports, comprising industrial machinery and auto parts and constituting nearly a quarter of its total goods exports, contracted in April and May due to the coronavirus pandemic and weak global demand.

"The US has been our No. 1 market, while the UAE, European Union countries and some of our neighbouring nations were major destinations for us," said EEPC chairman Ravi Sehgal. "But then the numbers have been turned on their head under the Covid-19 impact. Even as the world economies are trying hard to re-open, it would be long before exports can reach a level of re-assurance.

"Singapore has replaced the US as the No. 1 destination for Indian engineering exports."

Singapore imports electrical machinery, components, aircraft and ship parts and non-ferrous metal from India, the trade body said, adding there was a more than five-fold rise in exports of non-ferrous metal to Singapore in April from a year earlier. Over the last few years, Singapore has emerged among the top 10 destinations for Indian engineering exporters, with exports of more than US$80 billion in 2018-19.

Only Singapore and China, out of the top 25 destinations for India's engineering exports, managed a positive year-on-year growth in April, while the rest conceded massive contraction - some up to 91 per cent due to the hugely disruptive impact of Covid-19, an EEPC analysis showed.

Engineering exports to China were up 19 per cent year on year to US$173 million.

However, India's total engineering exports were down 63.9 per cent in April to US$2.31 billion from US$6.4 billion. In April, engineering exports to the US declined 75 per cent to US$222 million.

Mr Sehgal said India's engineering exports, which largely comprise manufacturing, face both internal and external challenges with the small and medium enterprises finding it difficult to stay afloat.

Raw material shortages - essentially steel, non-availability of work force, unviable fixed costs and disruptions in logistics are among the major domestic problems.

On the other hand, restrictions on movement of people and goods, rising trade barriers and geo-political issues remain challenging.

India is due to release monthly trade data for May next week and is widely expected to report another fall in exports.

Reuters

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