Engineering exports to key ASEAN countries nosedive.

KOLKATA: India's drop in the engineering exports in February by 3.05%, the first time in seven months, has resulted largely from a huge decline in the shipments to the key ASEAN markets of Singapore, Malaysia, Indonesia and Thailand of the trading bloc with which India has entered into a Free Trade Agreement, an EEPC India analysis has shown.

The decline in the engineering exports to these countries ranges from a huge 79% in February, 2014 year-on-year to 36%. The shipments went steeply down by 79.11% to Singapore, the major member of the Association of Southeast Asian Nations (ASEAN), Thailand by 61%, Malaysia by 70% and Indonesia by 36%.

However, the engineering exports to the USA took a turn for better and turned around from negative to positive growing by eight%, tough the April-February cumulative data for the US still remains negative to the extent of about five%.

"The slow demands in the South East countries have really depressed the overall situation for the engineering exports, which had shown a tremendous growth in the seven months, preceding February. While the April-February data would show a growth of little over 10% for the total engineering exports, we have to ensure that the February despatches do not form a trendline... With the elections scheduled next months, the government would also not be able to help either....we will have to wait for the next government," Chairman of the EEPC India, the apex body of the engineering exporters, Anupam Shah said.

While the exports to the ASEAN countries dropped sharply, the data showed a sizeable improvement in shipments of key engineering products to South Korea and Japan, the two other countries with which India has entered into a free trade pact.

The despatches to South Korea in February, 2014 went up by over 60% while to Japan they were up 16%.

Also, several major sectors have shown negative growth in February, 2014 in comparison to the same month of 2013. Segments with low engineering exports during February, 2014 include Iron and Steel that accounts for about 14 to 15% of India's total engineering exports. The sector's export fell by 14.19% to USD 708.79 million as opposed to $826 million in February 2013.

In addition, 14% of India's engineering export is accounted by industrial machinery. This sector noted a negative growth of 8% recording an export of USD 785.94 million in February. Ships and floating structure contributed around 11% of total exports in February 2013. In February 2014, its exports fell by 59.71% to USD 236.22 million as a result of which its share in total exports fell to 4.71%.

Minor segments too experienced a negative growth in February, 2014 vis-a-vis February, 2013. Export of zinc and its products decreased by 40.9% in February 2013-14. Products under nuclear reactors and industrial machinery like boilers fell by 4.84%.

Source : timesofindia.indiatimes.com