Engineering goods exports to US up 18% in Jan; tariff threat looms: EEPC

India's engineering goods exports to the United States recorded an 18 per cent year-on-year growth in January 2025, reaching $1.62 billion, even as overall engineering shipments grew at a modest 7.44 per cent, according to EEPC India.

This comes on a day US President Donald Trump criticised the high tariffs charged by India and other countries, terming them as "very unfair" and announced reciprocal tariffs from April 2 on nations that impose levies on American goods. 

During the April-January period of the current financial year, engineering exports to the US rose nearly 9 per cent to $15.60 billion from $14.38 billion in the corresponding period last year, it said.

Exports to the UAE grew 56 per cent year-on-year to $610 million in January, while cumulative shipments rose 45 per cent to $6.87 billion during the 10-month period of FY25.

Despite geopolitical tensions and growing trade protectionism, India's engineering exports have maintained positive growth for the ninth consecutive month. However, the pace of growth slowed to 7.44 per cent in January from 8.32 per cent in December, it added.

Total engineering goods exports stood at $9.42 billion in January 2025, compared to $8.77 billion in the same month last year, it added.

EEPC India chairman Pankaj Chadha acknowledged the resilience of Indian exporters but warned that evolving global trade policies are adding unprecedented pressure on businesses.

"Engineering exporting community has managed to record positive growth despite significant global turmoil in the form of continuing conflicts and increasing protectionism by some of our major export destinations. Global exports seem to be at the crossroads of major changes with new geopolitical challenges. Trade policies worldwide are evolving to address national concerns, but they are putting unprecedented pressure on businesses," Chadha said.

EEPC India, under the Union ministry of commerce, facilitates sourcing from India and encourages MSMEs to raise their standard on a par with international best practices. It also encourages MSMEs to integrate their business with the global value chain.

Chadha cautioned that the latest US tariffs highlight the challenges exporters are likely to face in the coming days, adding that continuous government support in export credit and technology would be critical to maintaining competitiveness.

Globally, more than 3,000 trade restrictions were implemented in 2024 alone, posing risks to the multilateral trading system, according to the Global Trade Outlook 2025 published by the International Chamber of Commerce (ICC), he added.

India's top engineering export destinations Germany, Mexico, Turkey, South Africa, France, Japan, Nepal and Bangladesh registered positive growth in January. However, shipments to the UK, Saudi Arabia, Malaysia, China, Italy, and Spain recorded negative growth.

Indian engineering exports continued their year-on-year growth streak for the ninth straight month in January, but the growth rate moderated to 7.44 per cent from 8.32 per cent in December, EEPC said.

January growth was primarily driven by exports of aircraft, spacecraft and parts, electric machinery and equipment, automobile and auto components, industrial machinery, products of iron and steel, and medical and scientific instruments, it added.

Meanwhile, shipments of ships, boats, and floating structures registered a sharp decline, along with iron and steel exports.

Cumulatively, engineering exports during the April-January period of FY25 stood at $96.75 billion, reflecting a 9.82 per cent growth over $88.10 billion in the same period last year.

The share of engineering goods in India's total merchandise exports was 25.86 per cent in January and 26.96 per cent in the April-January period of FY25, according to quick estimates from the department of commerce, it said.