Despite high additional tariffs on major components of the engineering sector, exports of these items to the US remained in the positive zone in May growing at 4.6% on year to $ 1.75 billion, according to an analysis.
In April-May, exports of engineering goods to the US were up 10.4% to $ 3.39 billion, according to Engineering Export Promotion Council (EEPC).
Overall in May India’s engineering exports to all countries were down 0.82% on year to $9.89 billion while in April-May engineering exports recorded 4.77% growth as it went up to $19.40 billion.
The US President Donald Trump’s additional duties of 25% on steel and aluminium and their products came into effect from March 12 this year but exports from these articles from India have continued to grow.
In April-May iron and steel exports to the US were up 170% on year to $ 158.4 million while products of iron and steel saw a growth of 10% to $ 518.9 million. Similarly industrial machinery exports to the US were up 17% to $ 774.1 million in the April-May period.
Exports of electrical machinery and components were up 10% to $ 500.8 million in April-May. The auto components including auto parts and auto tyres also remained steady at $ 394.7 million.
From June, president Trump has hiked duties on steel and aluminium to 50%. However, of the total $ 20 billion of engineering exports to the US last fiscal, the steel and aluminium and their products accounted for $ 5 billion. Auto components exports to the US were $ 2.5 billion.
As much was $ 12.5 billion of engineering exports to the US are covered by reciprocal tariffs. As reciprocal tariffs have been imposed partially and stand at 10%, exporters are speeding up their orders and buyers are buying more and stocking these products in anticipation of the full implementation of reciprocal tariffs from July 9. Trump has imposed a 26% reciprocal tariff on India.
Though the sector has weathered the impact of the tariffs well, the geo-political tensions in West Asia has seen exports to the key countries of the region decline.
The exports to the second biggest market the United Arab Emirates (UAE) were down 15.8% on year to $ 683.38 million while to Saudi Arabia the shipments were down by 42.6% to $ 337.1 million. To Turkey imports dropped 61.5% to $ 176.2 million.
“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,” chairman of EEPC Pankaj Chadha said.
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 West Asia and North Africa (14.3%) in Apr-May 2025.
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.