Engineering exports at $58 bn in FY'12 19% short of target

Weak demand from major markets led to fall in exports

India's engineering exports fell 19% short of target in the last fiscal at $58.2 billion on account of weak demand from major markets like the US and Europe. The government had set a target of $72 billion.

"In the first half of 2011-12, exporters were getting good number of orders, but in the second half there was a weak demand from western markets like the US and Europe," said an official of the Engineering Export Promotion Council (EEPC), which is under the Ministry of Commerce.

The US and Europe together account for over 60% of India's total engineering exports. Besides, the official said, lapse of the tax refund scheme -- Duty Entitlement Pass Book Scheme -- and high interest rates have affected the growth of the country's engineering exports. The major beneficiaries of the scheme, which ended on September 30, were engineering, chemical, pharma, textiles and marine products.

 

Engineering exports include transport equipment, capital goods, other machinery/equipment and light engineering products like castings, forgings and fasteners. For the engineering sector, which accounts for about one-fourth of the country's total merchandise shipments, the Commerce Ministry in its strategy paper has set a target of $125 billion by 2013-14.

The overall exports target has been set at $500 billion by then. During 2011-12, engineering exports grew 17% to $58.2 billion, compared to $49.7 billion in the previous fiscal. However, India's overall exports grew 21% and marginally crossed the exports target at $303.7 billion in 2011-12 over the previous fiscal.