INDIA ADDA – Perspectives On India

IBEF works with a network of stakeholders - domestic and international - to promote Brand India.



Dikshu C. Kukreja
Dikshu C. Kukreja
Mr. V. Raman Kumar
Mr. V. Raman Kumar
Ms. Chandra Ganjoo
Ms. Chandra Ganjoo
Sanjay Bhatia
Sanjay Bhatia
Aprameya Radhakrishna
Aprameya Radhakrishna
Colin Shah
Colin Shah
Shri P.R. Aqeel Ahmed
Shri P.R. Aqeel Ahmed
Dr. Vidya Yeravdekar
Dr. Vidya Yeravdekar
Alok Kirloskar
Alok Kirloskar
Pragati Khare
Pragati Khare
Devang Mody
Devang Mody
Vinay Kalantri
Vinay Kalantri

Export Performance of Engineering Products in India

Export Performance of Engineering Products in India

During the year 1955, the Indian engineering sector was quite narrow because of comparatively fewer development means of the utilization of resources. However, the situation changed with the establishment of the Engineering Export Promotion Council (EEPC) which was set up to provide strong support and push to the narrow base of this industry. The council has been under the sponsorship of the Ministry of Commerce & Industry, Government of India. It supported the export promotion of engineering goods, projects, and services from India. Apart from contributing to the development of policies, it also acts as an advisory body between the engineering industry and the government. It is currently the largest trade promotion organization in the country, with over 13,000 members belonging to engineering companies, corporate houses, and small/ medium enterprises. The council had around 60% of SMEs as members.

One of the largest industrial sectors in India is the engineering sector. It accounts for 27% of all industrial sector factories in India and 63% of all global foreign collaborations. India is one of the few countries in the world whose exports are primarily comprised of engineering and capital goods. The engineering sector accounted for more than 25% of India's whole export basket in 2021. In terms of low manufacturing costs, India has a comparative advantage over its competitors due to fewer labour costs, raw material and resource costs, marketing expertise, innovation, and technology. All these elements encourage additional investment in the sector.

Engineering exporters are India's top net earners of foreign money, in addition to being one of the greatest contributors to the total exports of India. The EEPC has established various product panels to ensure that all potential and possible Indian products reach the worldwide markets subject to the engineering sector's tremendous diversification.

Being the top contributors to the Indian export basket, engineering exports include transport equipment, capital goods, other machinery/equipment, and light engineering products such as castings, forgings, and fasteners. India exported engineering goods worth more than US$ 68.8 billion in the fiscal year 2021. Out of the total merchandise exports, engineering products accounted for one-fourth, and the USA was its leading importer. The demand for Indian engineering products in the USA registered an uptick of 39.8% from US$ 4,955.3 million in the first quarter of FY2021-22 to US$ 6,926.1 million in FY2022-23. The products mainly included iron and steel products, non-ferrous metals, Industrial machinery, and automobiles among others.

Key Indian Export Trends in Engineering

  • Cumulative engineering exports from April-November 2022-23 reached US$ 70.72 billion.
  • In November 2022, engineering exports were recorded at US$ 8.07 billion as against US$ 8.10 million in November 2021.
  • During the period of April-November 2022-23, 22 out of 34 engineering panels recorded growth over the same period last fiscal.
  • USA, Germany, Saudi Arabia, the UK, and Mexico were the top five engineering export destinations that witnessed growth during November 2022.
  • The largest importer of Industrial machinery was the USA with a 20% share in India’s total international exports of industrial machinery during April-November 2022-23. Thailand and Germany were the two immediate followers of the USA constituting 6% and 5% share consecutively in terms of India’s total global exports of industrial machinery.
  • The top three importers of India’s Automobiles during April-November 2022-23 were South Africa, Mexico, and Saudi Arabia in India’s global exports respectively.
  • USA, South Korea, and Netherlands were the top three importers of India's Non-ferrous metals and products' during April-November 2022-23 whereas USA, UK, and Germany were the three top importers of Indian Electrical Machinery & Components during the same period.

Export of Engineering Goods from India

Trade Flow

Export Figures (in US$ Billion)



April-July 2021-22

April-July 2022-23

Engineering Exports





Overall Exports





Share of Engineering (%)





Source: DCGI&S, Government of India and EEPC India

The table shown above depicts the cumulative engineering exports during April-July 2022-23 recorded 8.10% growth as they went up to US$ 38.31 billion from US$ 35.44 billion during April-July 2021-22. The target of US$ 127 billion was set up by the Government of India for engineering goods exports for FY2023. In context with the target for the entire fiscal year, the cumulative target for April-July 2022-23 on a pro-rata basis was US$ 42.33 billion. The target fell short by US$ 4.03 billion during the first four months. The estimated share of engineering in total merchandise exports was 25.77% in July 2022 while the share was 24.34% on a cumulative basis during April-July 2022.

With 100% FDI allowed through the automatic route, some of the major international players like Cummins, ABB, and Alfa Laval have entered the Indian engineering sector and have raised the level of strife in this industry. The rise in the level of competitiveness along with the growth in export levels has automatically contributed to the considerable momentum of the Indian economy. The tremendous technological progress and subsequent expertise have been witnessed by the Indian engineering industry in several areas. India has been able to put a mark on the world map in terms of either imported technologies or indigenously developed technologies. The considerable growth has significantly contributed to keeping India among the top ten industrial nations of the world with the largest pool of technical personnel and scientists in the world.

The Indian engineering sector has been roughly divided into two major segments which comprise heavy engineering and light engineering. There is a considerable comparative advantage in this sector in terms of manufacturing costs, market knowledge, technology, and creativity. Capacity creation in sectors such as infrastructure, power, mining, oil and gas, refinery, steel, automotive, and consumer durables is driving demand in the engineering sector of India.

Product Panel Wise Engineering Exports (in US$ Million)

Product Panels




April-July 2021-22




Iron and Steel and its Products







Non-Ferrous Metal and Products







Industrial Machinery







Electrical Machinery and Equipment







Auto and Auto Parts







Aircraft and Spacecraft parts and products







Ship Boats and Floating products and parts







Source: DCGI&S, Government of India and EEPC India

The table shown above depicts the growth in the export of different engineering products. In the total engineering export basket, steel and iron products hold a dominant share with a value reaching US$ 9.4 billion during April-July 2022. The export of aircraft and spacecraft parts and products significantly increased in the first quarter of the financial year 2022-23 in comparison to Q1 of the previous financial year as illustrated in the table. The USA, France, and Singapore were the top three importers of India’s aircraft and spacecraft parts and products during the period of April-July 2022 in India’s total global exports of engineering products followed by Germany and the UK.

In terms of the imports of Indian ships, boats, and floating structures; Singapore, Indonesia, and Sri Lanka top the list followed by the UK and UAE. On the other hand, the USA remained the top importer in the auto components product group segment in the first quarter of FY2022-23 which was followed by Brazil, Bangladesh, and Germany.

The Way Forward
After the pandemic-related downturn, India's engineering sector is starting to recover. However, in the first quarter of FY2022-23 engineering exports gradually decreased. This decline in engineering exports is the result of both domestic and foreign influences such as high inflation in developed regions, falling demand in China, the slowdown in the European Union, and the impact of the Russia-Ukraine war. The exports of engineering goods were also impacted by the weakening currency. The economies of the United States and the United Kingdom, which are the two countries that import a major share of India's engineering products, are already experiencing a noticeable downturn. The course of future events is unclear and uneven due to the changing geopolitical environment and the dynamics of global economic growth. Future global growth will depend on several factors, including oil price volatility, the conflict in Russia and Ukraine, the synchronized global slowdown, and the appearance of even stagflation fears in several countries, including the United Kingdom and the United States. The OECD had predicted that India's GDP growth would be negatively impacted by the slowdown in exports of important commodities such as engineering items, textiles, handloom products, and plastic products. Indian exports of manufactured goods occasionally face supply issues, and this industry was also negatively impacted by the lack of essential manufacturing inputs from China and the nation's reiteration of its zero COVID-19 policy.

Engineering exports are becoming more responsive to income changes as compared to price changes. As per UNCTAD estimations, a 1% decline in global GDP growth leads to a 1.88% decline in India’s growth of exports, while a 10% reduction in prices will lead to only a 5.4% increase in exports. The government’s support for this industry will generate jobs and promotes development on all fronts.