Export of iron and steel products witnessed a sharp rise of more than 100% in June, even as export of engineering goods from India registered a decline of 7.24%, said an analysis report by engineering export promotion council of India, on Friday.
“Out of 33 engineering export items ,27 recorded negative year-on-year growth in June, while all the six positive entries related to metals, with iron and steel being on top of the table,” the report said.
A drop in domestic demand, disruption in supply chain and acute shortage of construction labour led several top steelmakers to export more than 50-60% of their sales volume during May-June period.
Iron and steel recorded more than 100% growth in exports during June 2020 with shipments of $1.32 billion against $653.52 million in the same month last year. Non-ferrous metals witnessed a growth of over 30% during the same period.
EEPC India analysis also showed sharp decline in exports of industrial machinery, auto components, air-condition and refrigerators, machine tools and host of other items. The drop in exports value went up to 83% in some cases, like railway transport, it added.
Overall engineering exports in June dropped by 7.24% after a severe drop of 64 % in April amidst near-global lockdown and 24% decline in May, 2020.
However, during June, exports of iron and steel to China rose by over 1400% to $524 million from $35 million in the same month last year, to Vietnam it went up by over 700% to USD 183 million and to Taiwan, the increase was 200% to $35 million.
''India’s export of low value added intermediate products rose while high value added exports continued to dwindle…the government needs to identify those sectors and promote investment, technology upgradation and R&D in the same, " said EEPC India Chairman, Mahesh Desai.
Desai, founder of the Hyderabad-based Meera Group of engineering firm was appointed as the new chairman of the EEPC India in June.
Commerce and Industry Minister, Piyush Goyal, talking at an event organised by EEPC India said that the total merchandise exports for June , 2020 would return to almost 88% of shipments of the corresponding month of the previous fiscal.
"With unlocking of the economy, the exports should come back on track and the trend would be reflected in the June numbers," Goyal said.
Desai highlighted to the minister some of the restrictive measures being faced by Indian exporters in different countries and sought the government intervention.
"Turkey has imposed inappropriate duties on engineering goods like pumps," Desai said.
Desai also discussed other issues like formal launch of the Nirvik scheme, need for export credit being available at Repo plus two percentage points.
Finance Minister Nirmala Sitharaman dring February announced Nirvik (Niryat Rin Vikas Yojana) scheme to provide enhanced insurance cover and reduce premium for small exporters.
Desai said that as most of India’s engineering sector comprises MSMEs which do not have access to capital or technology, the government should extend them further help.