China’s subdued demand, new Covid strain potential threats to global trade: EEPC India

New Delhi, July 23 (SocialNews.XYZ) Subdued demand in China along with new Covid strain are potential threats to global trade said EEPC India.

However, EEPC India said that despite several potential headwinds, India's trade outlook for the current year has so far been positive.

Accordingly, engineering goods exports from India crossed $8 billion for the third time in the last four months.

Nonetheless, even as most product segments saw strong demand, aircraft and spacecraft parts were among the two panels that dipped marginally in June 2021.

"While engineering goods exports from India to most key nations recorded high double-digit growth in June, 2021 mirroring global trade recovery, shipments to China, Singapore and Malaysia fell sharply during this period," EEPC India said in a statement.

"Exports to China, world's largest buyer of raw material, in value terms declined 33% to $501.9 million in June, 2021 from $747.1 million in the same month last year. On a cumulative basis also, exports to China fell 15.4 per cent in April-June period of FY22 to $1357.9 million from $1604.9 million in the corresponding period last financial year."

As per trade data analysis by EEPC India, the US remained top importer of India's engineering goods followed by UAE.

Among the 25 key markets which together account for about 78 per cent of India's total engineering goods exports, 21 countries recorded positive growth during June this year.

"Impressive growth was seen in most product categories. Out of 33 engineering panels or product segments, 31 panels witnessed positive growth in exports during June 2021 vis-a-vis June 2020."

"Decline in exports experienced in two panels, zinc and products falling by 5.1 per cent and aircraft and spacecraft parts dipping marginally (0.6 per cent)."

According to EEPC India Chairman Mahesh Desai: "Engineering goods sector has been one of the top performers in exports. It recorded 50 per cent or higher year-on-year growth for the fourth straight month in June. During this period, engineering goods export was at its all-time high."

"This is quite heartening but there are several challenges the industry is facing. On the domestic front, there has been acute shortage of containers, high logistics cost and increasing price of key raw materials such as steel."

In terms of external front, Desai said that with domestic demand being subdued in East Asian manufacturing giants including Japan, China and Korea, the export volumes from these countries have been increasing which may pose a threat to the Indian exporters.

Source: IANS