Chennai, , INDIA, Aug 22, 2022: Selective focus of cargo ship leaving of chennai port
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India’s engineering goods exports grew 18 per cent year-on-year to $12.24 billion in July 2026, extending a strong run in the first four months of the financial year despite geopolitical tensions and disruptions around major trade routes in West Asia.While exports to the US, the largest market for Indian engineering goods, and China recorded strong growth, shipments to the UAE and Saudi Arabia declined amid continuing uncertainties in the region, according to figures compiled by the Engineering Export Promotion Council (EEPC) India.The US continued to be the largest market, with engineering exports rising 20 per cent year-on-year to $2.18 billion in July. Exports to China also rose sharply by 32 per cent to $349 million, the EEPC said in a statement on Wednesday.Engineering exports to the UAE, however, declined 12.1 per cent in July 2026 to $503 million, while exports to Saudi Arabia dipped 5.9 per cent to $359.3 million.Logistics crisisThe EEPC said the logistics crisis in and around the Strait of Hormuz had significantly affected shipments to Saudi Arabia, where engineering imports are largely linked to projects. “The ongoing conflict in the region has affected some projects and weakened purchasing activity,” it said.The US also remained the top destination for engineering goods during April-July, with exports standing at $7.78 billion, an 11.8 per cent increase over the year-ago period. Germany, the UK and Singapore also recorded growth, while shipments to Saudi Arabia declined, the EEPC noted.The sectoral performance was positive, with 27 of the 34 engineering panels registering year-on-year growth in July. Seven panels—including iron and steel products, lead and products, machine tools, aircraft, spacecraft and parts, cranes, lifts and winches, and office equipment—recorded declines.External risksDespite the strong export performance, the EEPC cautioned that external risks could weigh on the sector in the coming months. “Higher energy and shipping costs, geopolitical tensions, protectionist measures and increasingly stringent technical and regulatory requirements could raise the cost of accessing overseas markets,” EEPC India Chairman Pankaj Chadha said.“Engineering exports have remained above $10 billion in the first four months of FY27 but challenges remain ahead,” Chadha said, stressing the need for greater competitiveness and scale, technological upgrading, stronger compliance capacity and diversification of export markets.While the initiative would have to come from industry, he said, government support would also be important to ensure that export growth remains sustainable.Exports of engineering goods to Thailand declined mainly in IC engines and parts which can be explained by the country’s consistent shift towards electric vehicles, EEPC said. “Furthermore growing competition from RCEP members and increasing cost of compliance for Indian exporters exporting under AIFTA can also have some impact on India’s exports to the region,” it said.Published on August 26, 2026
