Engineering goods exports face container shortage hurdle

With exports demand for engineering goods looking strong in the coming months of 2021, continued non-availability of shipping containers could play a bigger spoilsport than even the likely third wave of Covid-19.

“Freights have gone up three times and people are willing to pay as well, but there is just no availability of containers. No one knows how to tackle the situation even though the export market looks robust,” said Suranjan Gupta, executive director of Engineering Export Promotion Council (EEPC) of India.

According to the preliminary official data, EEPC said India’s engineering goods exports continued the uptrend and posted a 52.61 per cent increase in June 2021 over the same period last year.

India’s merchandise exports in June was $32.46 billion, 7.34 per cent higher than the figure in the yearago month and an increase of 29.7 per cent over the same month in 2019.

The shortage of shipping containers started in January when India’s exports started to pick up after the first of Covid-19. Over the months, however, the situation worsened because of the second wave, said industry officials.

“There is a serious shortage of containers on the eastern coast of India. Now the only option is to speak to shipping lines to get commitment from them for these containers,” said Gupta.

However, a likely third wave of Covid-19 is not expected to hit trade as it did in the first two waves, said industry experts.

“The governments — both the Centre and states — are much better prepared for the third wave than they were for the first two,” said an exporter on the condition of anonymity.

Products such as auto components, hand tools, and medical devices were part of engineering exports. Requirement for these products was strong particularly from Europe, the US, Saudi Arabia, and the UAE for the past few months.

Pent-up demand and increased usage helped engineering goods since economies are opening up after the second wave, said another EEPC official.

The first two waves gave rise to sizable manpower issues over the past one-anda-half year, but increased pace of vaccination in coming months should sort out the issue to some extent, Gupta said. “As far as export volumes are concerned, the pick-up will also look strong since it will be on a relatively lower base,” said Gupta.

EEPC India is a trade and investment promotion organisation sponsored by the Ministry of Commerce & Industry and caters to the Indian engineering sector. As an advisory body, it actively contributes to the policies of the Union government. Currently, EEPC India has a membership base of over 12,000, of which 60 per cent are small-and-medium enterprises.