Sharp reduction in demand for base metals and commodities from China is impacting exports of India’s engineering products to the neighbouring country, an industry body said today.
The country’s engineering exports to China plunged by 38 per cent in August, while total outbound shipments of such items witnessed a fall of 29.5 per cent to USD 4.49 billion from USD 6.38 billion in the same month last year, EEPC said.
These numbers are “negating the contention that India is somewhat decoupled from slowdown in China,” Engineering Export Promotion Council of India (EEPC) said in a statement.
Engineering products, which have been hit hard by demand slowdown in China include steel, iron, non-ferrous metals, industrial machinery, auto components and bicycle parts.
“China once again recorded drop in exports by 43 per cent. The devaluation of Chinese Yuan has further created a dent in the competitiveness of Indian exports,” it said.
It said the exports to European destinations like the UK, Italy and Turkey too recorded negative growth during August.
The government’s decision to give protection to the domestic steel manufacturers by way of safeguard duty too has impacted the user industries and thereby exports, it added.
Engineering exports are the largest contributor to India’s overall outbound shipments.