India's Engineering Exports Thrive Amid Global Challenges with Support from Key Nations

India's engineering goods sector has managed to navigate global challenges, including tensions in the Red Sea, Ukraine, and the Israel-Hamas conflict, thanks to the backing of Russia, the UAE, Saudi Arabia, and unexpectedly, China. 

In the first five months of the current financial year, total engineering exports reached $46.41 billion, marking a 4.22% increase from $44.53 billion during the same period in 2023-24, according to the Engineering Export Promotion Council (EEPC).

Russia's purchases have surged by 40%, aided by a rupee-ruble trade arrangement and diminishing alternatives due to geopolitical factors. 

Notably, despite experiencing an economic slowdown, China saw an 11.3% increase in imports of Indian engineering goods, surpassing the $1 billion mark. This growth occurred even with a significant drop in iron and steel exports, which fell from $268.62 million to $123.77 million. EEPC Chairman Arun Kumar Garodia highlighted that China is increasingly sourcing aluminum products, electrical machinery, and auto components from India.

The UAE, benefiting from a Comprehensive Economic Partnership Agreement signed with India in April 2022, increased its imports of engineering goods by 44% during the April-August 2024 period. Meanwhile, Saudi Arabia is also boosting its imports from India amid ongoing negotiations for a free trade agreement. Garodia noted that both the UAE and Saudi Arabia have become the second and third largest markets for Indian engineering goods, following the US, with a particular emphasis on motor vehicles. Additionally, the UAE is importing aircraft, spacecraft parts, ships, and boats from India.