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China slowdown hurts India engineering exports: EEPC |
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KOLKATA: A sharp demand reduction in China for base metals and commodities, which is now enveloping world markets, has hurt India's engineering exporters in 24 of 33 sub-groups and products in August, an analysis by EEPC India has showed. The finding by the engineering export promotion council negates the contention that India is somewhat decoupled from the slowdown in the world's second largest economy.
A 29.5% on-year fall in engineering exports to $4.49 billion (Rs 29,465 crore) in August has hit as much as 73% of the engineering segments. Steel, iron, non-ferrous metals, industrial machinery, auto components and bi-cycle parts are among the most affected segments.
"The yuan devaluation has come at a time when India's external steel trade has reversed. India's primary iron and steel exports, which are among the key export items, have witnessed annual de-growth (drop) by almost 38% in August 2015," EEPC Chairman Anupam Shah said.
India's engineering exports to 21 countries fell in August, while just four - Singapore, Germany, Malaysia and the Netherlands - posted an increase.
Devaluation of the Chinese yuan has "further created a dent in the competitiveness of Indian exports," EEPC said.
Exports to top European destinations for the Indian engineering products, such as the UK, Italy and Turkey, saw a drop in both August and the April-August period. For August, even the US, which is perceived to be showing an economic recovery, saw a 13.5% fall in imports of engineering goods from India.
On top of the falling demand, the government's decision to give protection to the domestic steel manufacturers through safeguard duty and other support measures has hit the user industries, particularly in the small and medium scale enterprises, Shah said. "This has not really helped the situation and hit us very badly."
In a way, the scenario shows that India, rather than gaining from Chinese slowdown, is very much coming under pressure.
Source : economictimes.indiatimes.com
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