Engineering exporters have urged the government to rethink the 15% export duty imposed this May on iron and steel products, arguing that it was the most critical factor behind shrinking shipments in recent months and could pose a challenge in meeting this year’s export targets.
Exports from the sector have grown just 1.15% in the first half of 2022-23 to cross $55 billion, a little more than 43% of the $127 billion target set by the government for engineering goods.
“Our exports have been on a downward trend and declined 10.85% in September, which can be majorly explained by the falling steel exports,” said Engineering Exports Promotion Council (EEPC) India chairman Arun Kumar Garodia.
Exports of iron and steel dropped more than 60% in September and have contracted by about 30% since April, he said, terming this a ‘direct result’ of the export duty on iron and steel products.
“The drop in steel exports has impacted India’s potential in various key markets including Europe, North East Asia and Africa. We have requested the government to look into the export duty, especially on the stainless steel segment since these are major export products for India, mainly produced by MSMEs and have low domestic demand,” he pointed out.
The slowdown in China and Europe that account for almost a quarter of India’s engineering exports have also hurt shipments, and 15 of 25 key markets recorded a contraction in September, the Council said.