Dragged down primarily by iron and steel, aluminium, and copper India’s engineering goods exports declined 8.62% year-on-year in February 2025 to $9.08 billion from $9.94 billion in the same month last year. This has marked the first drop in monthly shipments of engineering goods since April 2024, ending a nine-month growth streak.
Cumulative growth as a consequence has also moderated to 7.97 per cent but the possibility of achieving a new all-time high in engineering exports in 2024-25 is almost certain. During the April-February period of the current financial year 2024-25, engineering goods exports stood at $105.85 billion as compared to USD 98.03 billion in the corresponding period of the previous fiscal.
“The year-on-year decline in February 2025 was mainly driven by a 58 per cent decline in exports of aluminium and products and a 40% decline in exports of iron & steel. Exports of ‘ships, boats and floating structures’ and ‘aircraft, spacecraft and parts’ also recorded a noticeable decline during this period,” said Pankaj Chadha, Chairman, EEPC India.
Country-wise, the US remained the top destination for Indian engineering goods followed by the UAE and Saudi Arabia in February 2025 while a maximum increase was noted in France (67 per cent), UAE (37.9 per cent), and the UK (31.9 per cent). In cumulative terms also the US remained the number one destination. Significant export growth was noted in the UAE, Singapore, Japan, France, and South Africa.
In February this year, engineering goods exports to the US grew 5.8 per cent year-on-year to USD 1.66 billion. Cumulatively, it rose 8.3 per cent to USD 17.27 billion during the April-February period of FY25 as against USD 15.95 billion in the same period last year. Engineering exports to China fell 11.9 per cent year-on-year to USD 207.45 million in February 2025. Engineering exports to Russia also declined during this period.
The EEPC India Chairman said, “The months of February and March of 2024-25 witnessed a major upheaval in the global trade – a result of the protective and retaliatory tariff measures adopted by the newly elected US President Donald Trump. The Trump administration has threatened retaliatory tariffs on some of its major trade partners including China, Canada and Mexico. India has also not been spared as the President has called it a “High Tariff Nation”, reiterating the need for reciprocal tariffs which are to be effective from 02 April 2025.”
Chadha stressed the need to diversify export destinations and at the same time also work out an agreement with the US that can lessen the impact of the ongoing tariff war. He further said, “The Government of India is already on the right track in diversifying as it signed new FTAs with UAE, Australia and the EFTA region. New FTAs are also being negotiated with the EU, UK, GCC, and Peru. More such FTAs are required in Latin America and Africa.
He added that at the same time to protect our market in the US, the Government of India is also contemplating a Bilateral Trade Agreement with the US. This is also a significant step and we are hopeful that if implemented, this would go a long way in protecting our global markets.”
The Indian engineering industry is bracing itself for two different impacts in case the higher US tariffs become effective. Firstly, the loss of the US market which is also the largest engineering export destination for India, and secondly, trade diversion that may happen due to this from China, Japan, South Korea, and Southeast Asian nations.
According to the quick estimates of the Department of Commerce, the share of engineering in India’s total merchandise exports was recorded at 24.61 per cent in February 2025 as against 25.86 per cent in January 2025. On a cumulative basis, the share was recorded at 26.75 per cent during April-February 2024-25.
