Chennai: Apart from the Red Sea crisis, increasing shipments of cheaper Chinese steel hit exports from India in April.
After experiencing steady growth in the last four months, India’s engineering exports declined in April by 3.2 per cent primarily due to lower shipments of metals, especially iron and steel, and copper.
Lower shipment of steel was mainly witnessed in Italy, Nepal, UAE, Netherlands, USA, China, and South Korea among others.
Excluding the export of iron and steel, engineering exports recorded a growth of 2.61 per cent in April. 2024. A substantial 36.41 per cent decline in exports of iron and steel therefore was the single most important reason behind the year-on-year decline in overall engineering exports during April 2024.
"There is a significant decline in Chinese steel demand which is encouraging Chinese exports at a much more competitive price compared to India," said Arun Kumar Garodia, Chairman, the Engineering Export Promotion Council of India. As per S&P Global, China's finished steel exports hit the highest level in six years at 90.26 million metric tonnes in 2023, up 36.2 per cent from 2022.
The decline in steel exports can also be attributed to low international demand in major markets and an increasing trend of near-shoring amongst developed markets. Other factors include a slow pick up of global demand since the trade contraction of 2023, tightening interest rates due to inflation in many major markets, and logistics issues such as the Red Sea Crisis.
"However, the industry is hopeful that global trade will pick up and India’s engineering exports will also get some boost in the coming months," said Garodia.
