Engineering exports to China from India double

The export of engineering goods to China doubled in November with the shipment of metals remaining high.

Engineering goods shipments to China grew 111 per cent in November, 2021 to $434.6 million as compared to $205.3 million in the same month last year. The growth largely came from exports of metals.

Italy, China and Belgium were the top three importers of Indian iron and steel. In November, the shipment of iron and steel grew by 117 per cent and during the April-November period the growth was 106 per cent. As far as iron and steel exports are concerned, the sector has already achieved 90 per cent of the annual target by November.

Similarly, China, South Korea and the US were the top three importers of India’s non-ferrous metals and products. Copper and products recorded and export growth of 105 per cent, tin and products 99 per cent and nickel and products 204 per cent in November. The growth has been equally high during the AprilNovember period. Nonferrous metal exports too have achieved 90 per cent of the annual target by November. In the case of China, non-ferrous metals exports from India grew 198 per cent between April and November from $637 million to $1900 million.

However, the ‘lower than expected’ growth in China and end of the holiday season will put pressure on the shipments from India.

Usually, environmental concerns hit the manufacturing sector during the winter in China as the government orders closure of highly polluting industries.

Further, a sharp rise in prices of base metals has been a key factor in the increase in engineering goods exports in value terms. Engineering goods exports garnered $17 billion increased export revenue in the first half of the fiscal and of this $13 billion came from the shipment of metals alone, finds Kotak Institutional Equities.

“We note that increase in both prices and volumes drove the sharp increase in metal exports. However, priceled impact may not sustain as we expect metal prices to decline from current levels over FY 2023-24,” said Kotak. Unit value of iron and steel exports was up 21 per cent and that of aluminium up 40 per cent in H1 FY22 against H1 FY20.

However, the industry is optimistic. “If prices cool off, we will become more competitive and there will be volume growth,” said Suranjan Gupta, executive director, EEPC India.