Falling for the fourth straight month, India's engineering exports declined over 6 per cent to USD 6.36 billion in September as against USD 6.77 billion in the same month last fiscal, EEPC India said on Wednesday.
The country's engineering shipments contribute 25 per cent to the overall merchandise exports.
A clearly visible global slowdown is biting engineering exports, suffering setbacks in almost all major destinations including the US, European Union, Middle East, South Asia or even CIS countries, with September shipments conceding fourth straight monthly decline and fifth in fiscal 2019-20, the engineering exporters body said.
Engineering exports from the country witnessed over 6 per cent decline in September, dropping in all months of fiscal 2019-20 barring May, it added.
In September 2019, shipment of Indian engineering products stood at USD 6.36 billion as against USD 6.77 billion in the same month last fiscal. Cumulative engineering exports during April-September 2019-20 dropped to USD 38.74 billion from USD 40.26 billion during the corresponding period previous year, registering 3.77 per cent decline, the exporters' body observed in an analysis.
Although the US remained the largest market for India's engineering exports during September this fiscal, valued at USD 954 million, it was 8.77 per cent lower than USD 1.05 billion in the same month last year. Likewise, during April-September, engineering exports to the US dropped to USD 5.75 billion from USD 5.80 in the comparable six months of 2018-19, EEPC India said.
"Data for most of our markets shows subdued trends, posing big challenges for Indian exporters. All the key stake-holders - exporting community, government, RBI and policy think tanks like Niti Aayog need to work together and re-strategise the approach towards exports in fast deteriorating global markets," EEPC India Chairman Ravi Sehgal said.
He suggested that a comprehensive game plan must also be laid out to take the maximum advantage of the existing free trade agreements with countries like South Korea, Japan and the ASEAN bloc.
EEPC India data showed year-on-year drop in exports to most of the major markets in Europe during September - the UK (-18 per cent), Germany (-16 per cent), Belgium (-53 per cent) and the Netherlands (-5.67 per cent).
"We need to double down on cutting our costs of production, transport and logistics like warehousing.
"Besides, our cost of funding is still amongst the highest in the world. Despite 135 basis points cut in the policy interest rates by the Reserve Bank of India, banks have not transmitted the reduction even by half of this amount. We are faced with outlook of slowdown in global trade and we need to rise to this challenge,'' EEPC India Chairman said.