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 moulding, valves, and ATMs.
India became a permanent Washington Accord (WA) member in June 2014. It is now part of an exclusive group of 17 countries that are permanent signatories of the WA, an elite international agreement on engineering studies and the 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 US$ 1.5 trillion in infrastructure development until 2026. In the Union Budget 2025-26, the government has allocated US$ 129.03 billion to enhance the transport infrastructure, thereby signalling the demand for engineering sector. 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 four million skilled and semi-skilled labour.
Export Trend
In FY25, India’s engineering exports reached a record high of US$ 116.67 billion, surpassing the previous peak of US$ 112.10 billion recorded in FY22. This represents the fifth record-setting year for the sector in the past eleven years. The sector grew 6.74% YoY from US$ 109.30 billion in FY24, significantly outpacing overall merchandise exports, which increased by just 0.08% to US$ 437.42 billion. Engineering exports now constitute 26.67% of India’s total merchandise exports, up from 25.01% the prior year. This strong performance is notable given the challenging global backdrop, including geopolitical tensions, economic slowdowns in key markets, and rising tariffs by the United States, highlighting the resilience and competitiveness of India’s engineering sector.
In FY26 (April-July 2025) export of engineering products stood at US$ 37.9 billion up from US$ 35.8 billion in the same period last year, reflecting steady growth in the sector.
Exports of capital goods contributed 62% total engineering exports from India. Primary iron, steel, and its products exports accounted for 17%, while Non-ferrous metals and products and consumer durables exports contributed 10% and 11% of India's engineering goods exports in FY25, respectively.
Export Destinations
Regionally, North America remained the leading export market with a 20.5% share, followed by the European Union (EU) at 17.1% and the West Asia-North Africa (WANA) region at 16.7%. Strong growth was recorded in Latin America (20%), Other Europe (19%), and Northeast Asia (14%), while exports to Oceania declined 10.4% and to the EU slipped 1.9%.
By country, the United States continued as the top destination, followed by the United Arab Emirates and Saudi Arabia. France posted the highest export growth at 43.2%, with Nepal at 37% and the United Kingdom at 32.9%. Overall, the United States remained the largest market, with notable gains in shipments to the UAE, Singapore, Nepal, Japan, and France. The share of the top five importing nations of India's engineering goods accounted for 36% of India's total engineering exports in FY26 (April-July 2025). This significant share is evidence of the dependence of India's engineering exports on the traditional markets.
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 at encouraging the exporter and to help increase 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 the 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, and buyer-seller meet and also to promote the 'Make in India' brand. It also provides services to its members and foreign buyers.
Vanijya Bhawan
1st Floor, International Trade Facilitation Centre,
1/1, Wood Street
Kolkata - 700016
West Bengal
India
Tel.:+91-33-22890651/ 52
Fax: +91-33-22890654
Email: eepcho@eepcindia.net
Website: www.eepcindia.org
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