Despite various challenges arising out of geopolitical tension and tight financial conditions in major advanced economies, India's engineering goods exports recorded a year-on-year growth of 10.20 per cent to USD 10.04 billion in December 2023.
While this represents a strong rebound, the sector still faces uncertainties due to the prevailing global economic conditions, an EEPC official said.
"It has been a challenging period for engineering exporters. Tensions in Europe and now in West Asia have posed significant downside risks," Engineering Export Promotion Council of India Chairman Arun Kumar Garodia said.
"Projections indicate a potential slowdown in global growth in 2024, and factors such as high interest rates and low consumer spending are expected to continue affecting the sector this year," he said.
Considering these factors, EEPC maintains a cautious optimism and hopes that geo-political tension will ease, leading to an improvement in the global macroeconomic situation, Garodia expressed that despite the robust overall demand, the Red Sea conflict is posing a substantial challenge, leading to delays and heightened freight expenses due to extended transit times. EEPC is of the opinion that forging additional free trade agreements, particularly with nations in Latin America and Africa, would grant exporters enhanced entry into burgeoning markets. With the Union Budget looming, EEPC suggested that the government could implement measures like offering affordable credit and market assistance to stimulate engineering exports.