Free Trade Agreements (FTAs) with the UAE and Australia recently provided a much-needed fillip to engineering exports. While overall shipments nosedived during the April-August period of the current financial year, deliveries to these two nations rose by 9 per cent. This growth highlights the importance of strategic trade pacts in a challenging global economy. Consequently, these agreements allow Indian firms to maintain momentum even when traditional markets face a significant slowdown.
Export Performance and Market Contrasts
The data for the first five months of the financial year shows a stark contrast between different regions. Specifically, engineering exports to the UAE reached $2.24 billion, which represents a solid 9 per cent increase. Similarly, shipments to Australia jumped to $596.14 million from $548.62 million in the previous year. Therefore, the implementation of FTAs acts as a primary driver for this localised growth. Furthermore, this trend suggests that trade pacts offer a resilient shield against broader global economic headwinds.
Russia Surge and US Market Decline
Notably, engineering exports to Russia surged by 178 per cent year-on-year. This represents a massive leap from $204.17 million to $568.41 million during the April-August period. However, the performance in the United States, which remains India’s top market, proved less positive as shipments fell 14 per cent. Consequently, the overall drop of 4.55 per cent in total exports, which fell to $44.62 billion, reflects the daunting challenges within major advanced economies.
Expanding FTAs to New Horizons
EEPC India Chairman Arun Kumar Garodia highlighted the benefits of these existing trade deals. He noted that the 9 per cent rise in the UAE and Australia markets proves the efficacy of FTAs. Furthermore, he urged the government to consider similar agreements with non-traditional partners. Specifically, he recommended targeting markets in Latin America and Africa to diversify risk. In conclusion, more FTAs could provide the necessary thrust to reverse the current decline in total engineering exports.
Courtesy :- TheEconomicTimes
