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Engineering growth amid the gloom
Articles- Sep 06,24
India's engineering goods exports touched $ 9.04 billion in July 2024, a rise of 3.6 per cent compared to $ 8.72 billion in July 2023, according to EEPC India.
India's engineering goods exports touched $ 9.04 billion in July 2024, a rise of 3.6 per cent compared to $ 8.72 billion in July 2023, according to EEPC India. Though exports to countries like Bangladesh and Russia recorded a decline in July 2024, the sector's cumulative exports for the April-July 2024 witnessed a healthy 4.18 per cent increase to $ 36.97 billion. The engineering (manufacturing) sector has been facing the headwinds such as high freight rates, protectionism, and weak demand in certain markets in the last few quarters. Hence, this continued upward trajectory of India's engineering goods exports reflects the sector's resilience amid a challenging global environment.
India is steadily moving towards becoming the manufacturing hub of the world. Recently, even Global Times, China’s official newspaper that has always been critical of India, acknowledged India's rise on the global manufacturing map. While sharing a list of the world’s top 10 countries in manufacturing output on the social media platform ‘X’, it specifically mentioned India. With a manufacturing value added of $ 456 billion, India ranked fifth in the list - ahead of countries like South Korea, Mexico, Italy, France and Brazil, but behind China, the US, Germany and Japan.
Meanwhile, a recent report of SBI Research, which projected a growth of 7-7.1 per cent for India's economic in the first quarter of FY25, warns a dip in the manufacturing sector. According to SBI Research, around 4,000 listed companies reported a 9 per cent growth in both top-line and bottom-line figures in the first quarter of FY25 as against the same period in FY24. However, if one excludes banking, financial services, and insurance (BFSI) sectors, the top-line growth of corporate houses was just 5 per cent compared to 23 per cent growth witnessed in Q1 FY24. While staff costs inched up, debt servicing capability (measured in terms of the interest coverage ratio) remained stable; leading to dip in profit margins.
Now, to increase local value addition in manufacturing, the Union Government is reportedly working on the new mission, called Rapid (Research, Analysis, Programme Implementation and Data Intelligence), with focus on key sectors like automobile, electronics and electronic components, medical devices, drones, defence aerospace and space.
GoI's Economic Survey noted that the manufacturing GVA (gross value added) bounced back from a disappointing FY23, growing by 9.9 per cent in FY24. However, it also expressed concerns about the sector's competitiveness, a goal the country aims to achieve through Rapid programme. Investing in innovation will be essential for India to create brands that not only excel in India, but can also be exported to key markets around the world. With Rapid programme, the government wants to encourage private sector to invest in local R&D and increase actual value addition in India’s manufacturing sector. This will be the key for India to reach closer to its goal of becoming a developed economy by 2047.
The Indian construction equipment industry achieved a 26 per cent increase in total equipment sales for FY 2023-24, with sales reaching 135,650 units compared to 107,779 units in FY23. This surpasses all previous projections. The industry's strong performance is attributed to a 24 per cent rise in domestic demand and a 49 per cent surge in export demand. The mission to building India as a sourcing hub has begun bearing fruit. At the RAHSTA (Roads & Highways Sustainable Technologies & Advancements) Expo scheduled on October 9-10 at Jio World Convention Centre, Mumbai, the technologies, the equipment that go to building roads will be on display. To register visit www.RAHSTAexpo.com
In this edition, SME features India’s Top 100 Engineering Companies who have emerged winners with their top-class performance in FY24 amid challenging market conditions.
India's engineering goods exports
manufacturing hub
Global Times
BFSI
Union Government
GoI's Economic Survey
Rapid programme
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