Exports of Engineering Goods jumped to USD 81.8 Billion during April-December 2021 (Provisional) as compared to USD 52.9 Billion during same period in the previous year (2020), registering a stupendous growth of 54%. Engineering Goods sector constitutes the largest, more than 27%, share of India’s total exports basket during the period.
As compared to April-December 2019 (USD 59.8 Billion), exports of Engineering Goods registered a growth of 37% while this represents a growth of 49% compared to April-December 2014 (USD 55.0 Billion).
In the month of December, 2021, exports of Engineering Goods touched USD 9.79 Billion, registering a growth of 38.41% over $7.07 Bn logged in December 2020.
The overall exports of Engineering Goods in the last Financial Year (March, 2020-April, 2021) was USD 76.62 Billion, and with the sector already logging USD 81.8 Billion in the first three Quarters of FY2021-22, the sector is set to scale further record highs despite the impact of the Covid19 pandemic since January, 2020.
India’s top five export destinations for the Engineering Goods sector in April-November 2021 (as per latest available data, share per cent mentioned in bracket) are: USA (14.7%), China (5.8%), UAE (5.1%), Italy (4%) & Germany (3.4%).
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 and forms part of the Foreign Trade Policy (FTP) of Government of India. The present Policy which came into force on 1st April, 2015, was for 5 years with validity upto 31st March, 2020. In order to provide policy stability during the pandemic period, FTP 2015-20 was extended for the year 2021-22 i.e. up to 31st March 2022.
The scheme allows import of capital goods for pre-production, production and post-production (including Completely Knocked Down/ Semi Knocked Down thereof as well as computer software systems) at zero Customs duty, subject to an export obligation equivalent to 6 times of duty saved on capital goods imported under EPCG scheme, to be fulfilled in 6 years reckoned from Authorization issue-date (para 5.1 a of FTP).
The Engineering Goods sector comprises of metal products, industrial machinery and equipment, automobiles and its components, transport equipment, bicycles, medical devices and renewable equipment.