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“India is aiming for $ 300 bn in engineering goods exports by 2030”
Interviews- Apr 15,24
In this interview with Rakesh Rao, Arun Kumar Garodia, Chairman, EEPC India, analyses the performance of India’s engineering goods exports and factors driving the global demand for Indian engineering goods.
While India’s engineering goods exports in February 2024 recorded an increase of 15.9 per cent to $9.94 billion over $ 8.58 billion a year back, the cumulative engineering exports during April 2023-February 2024 stood at $98.03 billion as against $96.84 billion in the corresponding period in 2022-23. The industry is confident to cross the 2022-23 figure this year, says Arun Kumar Garodia, Chairman, EEPC India, in this interview with Rakesh Rao.
How is the export scenario in 2023-24?
The performance of the engineering goods sector was good in 2023-24. Though we are yet to receive the final data from Ministry of Commerce, we are sure that engineering goods exports will cross the last year’s figure of $107.04 billion.
In the prevailing global market uncertainty, how did India managed to perform well?
In spite of all the global headwinds - such as recession in developed markets, interest rate increase, Russia-Ukraine war, Israel-Hamas conflict, supply disruptions due to Red Sea problem, etc - export performance has been good. The major reason for this good show has been China Plus One policy which is driving all countries to come to India. Second, the government has signed Free Trade Agreements (FTAs) with countries like UAE and Australia, which have had positive effect on our overseas trade. In March 2024, India also signed FTA with the European Free Trade Association, whose members are Switzerland, Iceland, Norway and Liechtenstein. This will also aid in boosting India's exports.
We are in final stages to sign FTAs with Gulf Cooperation Council (GCC) and Oman. Once the new union government is formed after the general election, these FTAs will be signed.
India has gained from the crisis between Russia and Ukraine, as India's engineering exports to Russia has doubled to $ 1.22 billion till February during the 2023-24 fiscal (compared to $ 616.68 million in the previous fiscal). Similarly, we have seen 60 per cent jump in exports to Saudi Arabia.
With more FTAs in place in 2024-25, you expect a boost in exports?
Yes; as FTAs are in the final stages, companies in these countries are already getting in touch with agents, suppliers and manufacturers in India, because they are also equally aware of duty concessions being offered in import-exports. They are also eager to develop their businesses.
What is the update on ASEAN FTA renegotiation?
No doubt renegotiation is currently underway, but any major announcement will come only after the new government assumes office after the election. We have already given our suggestions with respect to this.
Are you seeing diversification in exports?
The global headwinds have helped in diversifying exports, which has really helped in a big way. For example, because of Russia-Ukraine war, Russia has started importing quite a lot from us.
How big is the factor of China Plus One Policy in increasing exports from India?
This has been a big booster to all sectors which are into exports. Global firms are looking for a reliable alternative to China and India stands to gain from this trend.
What is your outlook for engineering goods exports in the next two years?
This year, only the steel sector has not done well because the first six months were bad for them. Steel exports have picked up after January 2024 and, hence, they should come out with robust figures in March 2024. So, we expect the buoyancy in engineering exports to carry forward in 2024-25 and beyond.
We have already set an ambitious target for us. As per the vision document submitted to the government, we aim to grow engineering goods exports to $ 300 billion by 2030 and we are working towards achieving this goal.
Indian engineering goods exports
Arun Kumar Garodia
EEPC India
FTAs
Russia Ukraine war
Rakesh Rao
China plus one policy
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