Engineering exports face tough times on demand squeeze

Amid a fall in demand in major global markets, India's engineering exporters will find it difficult to retain last year's export growth of 13.7 per cent at $37.85 billion in the current fiscal. 

"At this stage we feel that even attaining exports in the range of $38 billion to $40 billion in the current fiscal will be an achievement," Engineering Export Promotion Council Chairman Aman Chadha told PTI.    

Booking of advance orders last year when going was good, helped exporters to tide over the crisis, he said. 

Exporters are pinning their hopes on revival of demand in the major markets due to large stimulus packages. However, at best only tentative revival signs could be visible in select export destinations.   

The engineering sector which depends on the US and the European markets for over 40 per cent of its revenue, managed a healthy annual expansion of 13.7 per cent in 2008-09 thanks to a robust growth of 42 per cent in the first half of the year.

The impressive performance up to September helped the exporters to post overall growth despite a sharp erosion in shipments in the second half.   

"Since October, the exports started declining due to less demand from the US and European markets," Chadha said. 

In the backdrop of global meltdown, India's total exports, after growing by 30 per cent during April-September 2008-09, were affected due to the global economic slowdown and aggregated $ 168.70 billion, managing a paltry growth rate of 3.4 per cent year-on-year. 

"Had the exports not been hit by the economic slowdown, we would have recorded a growth rate of 30-35 per cent in 2008-09," Chadha said.