Indian engineering exports face headwinds in May 2025 amid geopolitical tensions

A significant factor in the overall decline was the sharp fall in exports of 'aircraft, spacecraft and parts,' which slumped by 85 per cent, and 'ships, boats and floating structures,' down by 25 per cent year-on-year in May 2025.

The report also mentions that, shipments to the US, India's top engineering export destination, remained positive with a 4.6 per cent year-on-year growth to USD 1.74 billion, exports to other major markets showed a mixed trend. While, engineering exports to the UAE, Saudi Arabia, and Turkey saw a substantial decline.

"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," said Pankaj Chadha, Chairman, EEPC India.

Additionally, exports to China also registered a 5.1 per cent year-on-year decline, reaching USD 207.36 million in May 2025. However, countries like Germany, the UK, Japan, Italy, Nepal, Brazil, South Africa, and the Netherlands recorded positive growth. Conversely, Mexico, Turkey, and Vietnam experienced negative growth in engineering exports.

However, despite the monthly dip, India's engineering exports showed resilience on a cumulative basis, recording a 4.77 per cent growth to USD 19.40 billion during the April-May period of 2025-26, up from USD 18.52 billion in the same period last fiscal.

"In these circumstances, India has to adopt a cautious approach. The guidance and support from the Ministry of Commerce and Industry would be crucial for the industry, especially in developing new technologies in upcoming areas, including rare earth magnets and exploring new markets," said Pankaj Chadha. (ANI)