INTRODUCTION
Engineering is the largest industrial sector in India and accounts for 3.53% of the country's Gross Domestic Product (GDP). The country's engineering sector comprises manufacturing iron, steel, related products, non-ferrous metals, industrial machinery, automobiles, auto components, and other engineering products. The key goods exported under the industrial machinery category are IC (Internal combustion) engines and parts, industrial machinery for dairy, food processing, textiles, industrial machinery like boilers, parts, machinery for injecting molding, valves, and ATMs.
India became a permanent member of the Washington Accord (WA) in June 2014. it is now a part of an exclusive group of 17 countries that are permanent signatories of the WA, an elite international agreement on engineering studies and mobility of engineers. India's engineering sector has witnessed remarkable growth over the last few years, driven by increased investment in infrastructure and industrial production. In 2019, the government announced an investment of Rs. 100 lakh crore (US$ 1.5 trillion) in infrastructure development over the next five years. In the Union Budget 2022-23, the government gave a massive push to the infrastructure sector by allocating Rs. 199,107 crores (US$ 26.52 billion) to enhance the transport infrastructure. The engineering sector is an important component of the broader manufacturing sector, and the share of engineering products in overall manufacturing output is quite significant. It is also a highly organized sector dominated by large players employing over 4 million skilled and semi-skilled labor.
EXPORT TREND
The engineering goods export of India had a share of 23.77% out of the total exports during April-September 2022 from the country. Exports of Engineering Goods jumped to US$ 54.45 billion during April-September 2022 compared to US$ 54.52 Billion during the same period in the previous year. The impressive growth in Engineering Goods exports in recent years has largely been due to the Zero duty Export Promotion Capital Goods (EPCG) scheme of the Ministry of Commerce & Industry which forms part of the Foreign Trade Policy (FTP) of the Government of India.
Exports of capital goods contributed about half of the total engineering exports from India. Primary iron, steel, and products and consumer durables exports accounted for 21% & 20%, respectively, while Non-ferrous metals and products export contributed 9% of India's engineering goods exports in 2020-21.
The iron, steel, and products exports of India were valued at US$ 18.6 billion in 2020-21, witnessing a growth of 14.5% over the previous year. Among the key products exported from non-ferrous Metals and Products made of non-ferrous metals, Aluminum and products exports were the highest at US$ 5.8 billion in 2020-21 growing by 13.2% over the previous year. Industrial machinery recorded exports of US$ 11.7 billion, while electrical machinery exports were valued at US$ 8.1 billion in 2020-21.
EXPORT DESTINATIONS
India exports engineering products to the following regions: ASEAN, North-East Asia, Africa, EU, North America, CIS, Latin America, South Asia, Africa, Middle East, West Asia, etc. The top Indian engineering goods importing countries are the USA, the UAE, China, Italy, and Germany, with a share of 15.5%, 5.0%, 4.9%, 3.7%, and 3.4%, respectively. 23 out of the 25 countries recorded positive cumulative growth in engineering exports during April-March 2022 over April-March 2021.
Share of the top 25 importing nations of India's engineering goods accounted for 74.6% of India's total engineering exports in 2021-22. This significant-high share is evident of the dependence of India's engineering export on the traditional markets. Italy, UAE and Belgium were the top three importers of Indian Iron and Steel during 2021-22, whereas the US, Germany and the UK were the top three importers of India's 'Products of Iron & Steel' during the same period as compared to 2020-21.
Indian industrial machinery saw the highest imports from the US during 2021-22. Thailand and Germany were the two immediate followers of the US. South Africa, Mexico and Nigeria were the top three importers of India's Automobiles during 2021-22 in India’s global exports respectively over the same period last fiscal.
During 2021-22, the top three importers of India's Non-ferrous metals and products were China, South Korea and the US whereas the US, Germany and France were the three top importers of Indian Electrical Machinery & Components during the same period.
GOVERNMENT INITIATIVES
The government of India has implemented various export promotion schemes, such as the Zero duty Export Promotion Capital Goods (EPCG) scheme, Towns of Export Excellence (TEE), Market Access Initiative (MAI), etc. These schemes are aimed to encourage the exporter and to help grow the revenue from international markets. Also, schemes such as duty exemption, advance authorization, duty-free import, rebate on service tax, etc. have been implemented to ease raw material imports. The Indian Engineering Exposition (INDEE), a brand of EEPC India, is one of the largest engineering expositions in the world.
Apart from the specific schemes mentioned above, the Government of India has taken several initiatives to support and enhance the competitiveness of the domestic engineering goods manufacturing firms such as the \"Make in India\" initiative, PLI scheme for Automobile, and Auto components, PLI scheme for National Programme on Advanced chemistry cell (ACC) Battery Storage, FAME INDIA II scheme, Capital goods scheme, Industry 4.0.
The Government of India, along with the Engineering export promotion council, frequently organizes International Engineering Sourcing Show (IESS) with the main objective of promoting India's image and providing a platform for Indian exporters to showcase their strengths and capabilities in an emerging market. This has become a unique platform between Indian and overseas engineering firms with B2B meets, thematic seminars and exclusive country and state sessions, bilateral forums.
GOVERNMENT BODY
Engineering Export Promotion Council (EEPC)
Formed in 1955, EEPC is a trade and investment promotion organization for the Indian engineering sector. The primary responsibilities and activities of the council are to arrange seminars, exhibitions, buyer-seller meets and also to promote the 'Make in India' brand. It also provides services to its member and foreign buyers.
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