Engineering exports may dip by 6% in FY13 to $56 bn

India's engineering exports, which are hit hard by the global demand slowdown, is expected to decline by over 6% and may touch $56 billion by the end of the current fiscal.

The industry has fixed an export target of $60 billion for 2012-13.

"Our traditional markets - the US and Europe - are not recovering at a healthy rate. We can at maximum reach $56 billion," Engineering Export Promotion Council (EEPC) Chairman Aman Chadha told PTI.

He said although exporters have found new markets such as those in Latin America and Africa, but they are cautious while exploring new destinations due to reasons such as fear of payment default.

Chadha said the government needs to take urgent steps to boost exports from the sector in the coming years.

"2013-14 will also be a difficult year for exports. We need support from the government to enhance our exports. Engineering exports next fiscal will maximum reach up to $60-61 billion," he added.

The Council has set a target of $72 billion at the beginning of the current financial year but later revised it downwards to $60 billion for this fiscal keeping in view the decline in demand from the traditional markets.

The US and Europe together account for over 60% of India's total engineering exports.

During April-February 2013, exports from the sector dropped by 3% to $51 billion.

The decline in engineering exports is in sync with the country's overall exports that fell by 4% year-on-year to $265.95 billion during the first 11 months of the current fiscal.

Engineering exports include transport equipment, capital goods, other machinery/equipment and light engineering products like castings, forgings and fasteners.

During 2011-12, engineering exports grew 17% to $58.2 billion, compared to $49.7 billion in the previous fiscal.

The engineering sector has emerged as the largest contributor to India's total merchandise exports followed by gems and jewellery, textiles and chemicals.