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India Gazette
5 days ago
- Business
- India Gazette
Indian engineering exports face headwinds in May 2025 amid geopolitical tensions
New Delhi [India] June 26 (ANI): India's engineering goods exports experienced a marginal 0.82 per cent year-on-year dip in May 2025, to USD 9.89 billion, weighed down by escalating geopolitical tensions in the Middle East and West Asia, and a high statistical base from the previous year, according to a recent report by EEPC India. A significant factor in the overall decline was the sharp fall in exports of 'aircraft, spacecraft and parts,' which slumped by 85 per cent, and 'ships, boats and floating structures,' down by 25 per cent year-on-year in May 2025. The report also mentions that, shipments to the US, India's top engineering export destination, remained positive with a 4.6 per cent year-on-year growth to USD 1.74 billion, exports to other major markets showed a mixed trend. While, engineering exports to the UAE, Saudi Arabia, and Turkey saw a substantial decline. 'The decline can be explained by the growing geopolitical tensions in the area and the rising threat to logistics. Export of aluminium and its products was also hit due to increased competition in the ASEAN region. Decline was also noted in exports of metals like zinc and lead, and aircraft, spacecraft, and parts,' said Pankaj Chadha, Chairman, EEPC India. Additionally, exports to China also registered a 5.1 per cent year-on-year decline, reaching USD 207.36 million in May 2025. However, countries like Germany, the UK, Japan, Italy, Nepal, Brazil, South Africa, and the Netherlands recorded positive growth. Conversely, Mexico, Turkey, and Vietnam experienced negative growth in engineering exports. However, despite the monthly dip, India's engineering exports showed resilience on a cumulative basis, recording a 4.77 per cent growth to USD 19.40 billion during the April-May period of 2025-26, up from USD 18.52 billion in the same period last fiscal. 'In these circumstances, India has to adopt a cautious approach. The guidance and support from the Ministry of Commerce and Industry would be crucial for the industry, especially in developing new technologies in upcoming areas, including rare earth magnets and exploring new markets,' said Pankaj Chadha. (ANI)
Time of India
5 days ago
- Business
- Time of India
Engineering goods exports dip 0.82% in May, shipments to US stay positive
New Delhi: India's engineering exports conceded a marginal 0.82% year-on-year decline to $9.89 billion in May 2025 due to a higher statistical base and geopolitical tensions in the Middle East and West Asia, but its share in the country's total merchandise exports increased to 25.53% during this period. Among the major product groups, exports of 'aircraft, spacecraft and parts' slumped by 85% and that of 'ships, boats and floating structures' dropped by 25% year-on-year in May 2025, which mainly caused the decline in overall engineering exports. Country-wise analysis showed a substantial decline in engineering exports to the UAE and Saudi Arabia in May this year. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Join new Free to Play WWII MMO War Thunder War Thunder Play Now Undo India's engineering exports to the US, top destination among major exporting countries, remained positive in May 2025 with total shipments growing 4.6% year-on-year to $1.74 billion. Engineering shipments to China registered a 5.1% year-on-year decline to $207.36 million in May 2025 as compared to $218.59 million in May 2024. Live Events Engineering goods exports to countries such as Germany, the UK, Japan, Italy, Nepal, Brazil, South Africa, and the Netherlands showed positive growth in May this year. Among key markets, engineering exports to Mexico, Turkey, and Vietnam registered negative growth. On a cumulative basis, India's engineering exports recorded 4.77% growth as it went up to $19.40 billion during the April-May period of 2025-26 from $18.52 billion during the same period last fiscal. Commenting on May trade data, Pankaj Chadha, Chairman, EEPC India , said, in a statement, "While India's engineering exports to the US and EU grew, a significant decline was noted in UAE, Saudi Arabia, and Turkey, which are significant markets for India and feature prominently in India's top 25 destinations. The decline can be explained by the growing geopolitical tensions in the area and the rising threat to logistics. Export of aluminium and its products was also hit due to increased competition in the ASEAN region. Decline was also noted in exports of metals like zinc and lead, and aircraft, spacecraft, and parts." The global trade is currently going through a phase of uncertainty. The European Central Bank has revised the global trade growth down by 0.4% to reach 3.1%. They have also revised down the global trade growth in 2026 to 1.7% after which it is expected to grow. "The reasons behind this dismal trade performance are explained by the growing geopolitical tensions across the Middle East and West Asia, policy uncertainty in the US, and protectionist measures by some of the major markets. In these circumstances, India has to adopt a cautious approach. The guidance and support from the Ministry of Commerce and Industry would be crucial for the industry, especially in developing new technologies in upcoming areas, including rare earth magnets and exploring new markets," Chadha said. In May 2025, as many as 26 out of 34 engineering panels witnessed positive year-on-year growth, while 8 engineering panels, including mainly non-ferrous metals like aluminium, zinc, lead, tin, machine tools, aircraft and spacecrafts, ship and boats, witnessed a decline in exports. On a cumulative basis, 29 out of 34 engineering panels recorded positive growth, and the remaining 5 engineering panels, including aluminium products, zinc products, aircraft and spacecrafts, cranes and winches, recorded negative growth during the April-May period of 2025-26. Region-wise, North America maintained its spot as the number one export destination with a share of 21.3% followed by the EU (17.7%) and WANA (14.3%) in Apr-May 2025.
United News of India
5 days ago
- Business
- United News of India
EEPC India urges Govt to include sectoral tariffs in BTA with US
Mumbai, June 25 (UNI) The proposed India-US bilateral trade agreement (BTA) should include sectoral tariffs like steel, aluminium, and auto parts as it is crucial for engineering goods exports which account for nearly one-fourth of the country's total merchandise exports, according EEPC India chairman Pankaj Chadha. Speaking at the EEPC India Regional Award Presentation ceremony for the fiscal year 2021–22 here, Chadha today said, "It would be unfair on engineering exporters if there is a BTA done without looking at sectoral tariffs. Sector tariff happens to be an important facet of India's exports. We are doing more than around 20 billion dollars of exports to USA. "So they can't overlook us and do a deal. As and when the first tranche of BTA is done, we hope the sectoral tariff and auto component tariff is part of it."He expressed hope that a free trade agreement (FTA) with the European Union (EU) could be signed as early as this year considering that a trade deal with the UK has already been finalised and seen as a template for FTA with major developed countries. "We are hopeful that in this year, we are going to sign. We are very close to it. I would say that one of the closest FTAs we have at the moment is the EU FTA," he said. Chadha noted that while India-UK FTA has been finalised its implementation may take about a year. "The FTA with the UK has to be passed in the UK parliament and then there is a cooling off period for getting reservations from the general public and then it will be passed and then it will come into effect. So the earliest we are looking at using the UK FTA is 12 months from now if everything goes well," he said. Chadha suggested a three-year moratorium for Indian MSMEs from carbon tax proposed by EU under Carbon Border Adjustment Mechanism (CBAM) which would come into force in January 2026. He also flagged off the EU's extension of safeguard duty on certain steel products and requested the government to find a solution to it while finalising trade deal with the EU. The EEPC India chairman also raised concerns of the mica industry and said that the mineral has been categorised as a rare earth mineral and as a result impacting its exports. "Mica has been classified as rare earth. That makes it difficult for the industry to trade in mica. I don't think mica is a rare earth. It is commonly available. India has 85% of mica deposits. In view of that we may possibly remove it from the rare earth category. Otherwise, it gets restricted for exports," he noted. Maharastra Development Commissioner ( industries) Deependra Singh Kushwah said "We are trying our best to support exports from Maharashtra and it is our duty. But the main role comes from your side (exporting community). We just facilitate and support. Actual exports are done by you and that is why Maharashtra is the second largest exporting state in the country. Engineering sector plays a very important part in exports from Maharashtra." "Last year we released our export policy under which there are multiple provisions for setting up export-oriented parks and exports-oriented special projects. The government is providing subsidy upto Rs 50 crore and Rs 100 crore for each project. And 30 such projects are to be set up in Maharashtra under this policy over a period of five years. He urged exporters to avail the benefits of the state government's exports policy. Kushwah also said that the state government is implementing a 10-point programme to boost exports. The 10-point programme is aimed at product diversification, capacity building, market access and institutional support among others. While congratulating award winners for fiscal 2021-22 at the event, Anoop Marwaha, Regional Chairman (Western Region), EEPC India said that FY22 marked a significant milestone for India, with engineering exports surpassing $100 billion for the first time, reaching an impressive US$ 112.16 billion. "This achievement reflects the resilience, adaptability, and innovation of the exporting community," he said. Marwaha recalled how global economic activities virtually came to a halt in the beginning of 2020 as countries across the world imposed complete lockdown in the wake of Covid pandemic. "It was indeed a tough job, and the awards are much deserved," he said. As many as 90 awards across seven categories were presented to the most dedicated and high-performing member exporters. Hindalco Industries, JSW Steel Industries, Tecnimont Pvt Ltd, JSW Steel Coated Products Ltd, Fiat India Automobiles Pvt Ltd, Jaydeep Industries, Jekson Vision Pvt Ltd, Federal Engineers and Oilex Engineers (India) Pvt Ltd were among the winners under different categories. UNI PC BM
The Hindu
19-06-2025
- Business
- The Hindu
Why oil prices are increasing amidst Iran-Israel tensions
The story so far: Escalating tensions between West Asian nations Iran and Israel since last week sent prices of oil spiralling upwards with fears mounting about a potential disruption in oil supplies globally. The benchmark Brent crude futures had soared about 9% Friday (June 13) to $75.65 for a barrel after it hit an intraday high of $78.50/barrel – a near five-month high. The paradigm however sought to ease Monday when news reports suggested that Tehran has asked Qatar, Saudi Arabia and Oman to press U.S. President Donald Trump to help Israel agree for an immediate ceasefire. At the time of writing (about 8 p.m.), Brent crude futures were about 2.4% higher from Monday at $74.98/barrel. Why is the tension causing oil prices to rise? At the centre of the entire paradigm is Iran's recurrent threats to close down the Strait of Hormuz. It is the chokepoint that connects the Persian Gulf with the Gulf of Oman and Arabian Sea. For perspective, chokepoints are narrow channels along widely used global sea routes that are utilised for transporting oil through sea. The closure of a chokepoint, even if for a temporary period, can translate to potential delays in supply, reduction in traffic and rise in shipping and insurance costs. All of it culminating into increased price of energy fuel. Though alternatives exist for some chokepoints, but they could entail significant increase in transit times. In fact, from the larger perspective of trade, Pankaj Chadha, Chairman of the Engineering Exports Promotion Council of India explained The Hindu last week that the escalation of the conflict in the Middle East would bar access to the Suez Canal and the Red Sea. '(This) will have a huge cost and time escalation for Indian exports by ship,' Mr. Chadda held. U.S.' Energy Information Administration (EIA) in an analysis published Monday held that the Strait was 'deep and wide enough' to handle the world's largest crude oil tankers. It further observed that the Strait facilitated transportation of an average of 20 million barrels each day (md/d) in 2024. This is equivalent to approximately one-fifth of the global petroleum liquids consumption. Additionally, the Paris-based International Energy Association (IEA) attributed the Strait to have served as the exit route from the Gulf for approximately one-fourth of the global oil supply including from major oil-producing nations Saudi Arabia and United Arab Emirates alongside Kuwait, Qatar, Iraq and Iran itself. According to EIA's estimates, 84% of the crude oil and condensate alongside 83% of liquified natural gas transported via the Strait headed to Asian countries in 2024. Primarily, this includes China, India, Japan and South Korea. How is the world positioned to manage the uncertainty? IEA indicated in their June outlook published Tuesday that oil markets in 2025 'look well supplied' in the absence of a major disruption. This is premised around expectations of supply being able to surpass demand. IEA forecasts world oil demand to increase by 720 thousand barrels a day (kb/d) this year whilst supply is projected to rise 1.8 mb/d to 104.9 mb/d. Additionally, it observed from preliminary data that global observed oil inventories have risen by 1 mb/d on an average since February, and 93 million barrels in May alone. However, it cautioned, 'While the market looks comfortably supplied now, the recent events sharply highlight the significant geopolitical risk to oil supply security.' Furthermore, JM Financial observed in their recent sectoral report that there could be a 'huge upside risk' if Iran disrupts the supply from the Strait of Hormuz. However, it holds the scenario is 'extremely unlikely' as in the past, for 'U.S. and Western countries are likely to take strong measures against any such disruptions given the huge risk it can pose to global oil and gas prices and, hence, inflation.' Imperative to note though that Iran's own production capacity may not have a significant bearing in the paradigm. This is owing to U.S. sanctions on import of Iranian crude oil. Tehran's major export destination is China. Refineries in the Asian country have particularly benefited from discounted fuel from the West Asian counterpart. What does it mean back home? Aditi Nayar, Chief Economist at ratings agency ICRA, observed that while crude oil prices have risen quite sharply over the past few days, it has been from 'rather benign levels'. She holds that should the price persist at the current levels, it may not lead to a 'material revision' in ICRA's GDP forecast of 6.2% for the fiscal. 'However, a sustained increase from the current levels would weigh on India Inc's profitability and the extended uncertainty may further delay private capex expenditure,' Ms. Nayar told The Hindu. She summarised this could potentially translate to a downward revision in ICRA's GDP growth projections for the second half of the fiscal. Albeit in an unrelated context, Paras Jasrai, Associate Director at India Ratings and Research observed the conflict between Israel and Iran added 'fuel to the global economic uncertainty' marred by tariffs-led volatility. 'The crude oil prices are in the vicinity of $75/barrel. If the conflict escalates further, then that could spring up wholesale inflation and have broader economic ramifications,' he held. Mr. Jasrai adds that favourably though declining food prices have 'given a cushion in keeping wholesale inflation at tepid levels'. The primary concern with respect to India could potentially be about how things shape up at the Strait of Hormuz. This is because India does not import petroleum crude from Tehran. Amit Kumar, Partner and Energy and Renewable Industry Leader at Grant Thorton Bharat had told The Hindu last week, 'India imports more than 80% of its crude oil needs. Hence, even if direct imports from Iran are minimal, global price spikes due to conflict will raise crude oil import costs.' On the aspect of supply, imperative to note that Union Petroleum Minister Hardeep Singh Puri in a social media post on Monday has affirmed the India having diversified their import basket substantially are comfortably placed to meet their fuel supply needs. With inputs from TCA Sharad Raghavan
United News of India
17-06-2025
- Business
- United News of India
India's engineering goods export sector continues to show resilience: EEPC India
Kolkata, June 17 (UNI) India's engineering goods export sector continues to show resilience despite persistent global challenges, though it recorded a marginal dip in shipments during May 2025, the cumulative number stays positive, according to EEPC India. As per the official data, engineering goods exports declined 0.8 per cent year-on-year in May-25 to $9.89 billion as compared to $9.97 billion in the same month last year. Cumulatively, engineering goods exports during April-May period of FY26 stand at $19.40 billion as against $18.52 billion in the same period last year thus registering a growth of 4.7 pc, EEPC India chairman Pankaj Chadha said on Tuesday. Overall global situation, however, remains volatile. Uncertainty has only been mounting due to geopolitical tensions in the key parts of the world. The latest Israel-Iran conflict threatened to multiply the challenges for the exporting community. Apart from rise in input costs as a result of a jump in crude prices, there was heightened concern around blocking of Straits of Hormuz by Iran in case tensions further intensify. In that case, logistics costs could surge significantly, Chadha said. The doubling of tariff by the US on steel, steel products, and aluminum to 50 pc is already threatening to impact engineering shipments during the current fiscal. It is expected that once India and the US reach an agreement, the tariffs will be reduced, he added. UNI PC PRS
