Engineering exporters body EEPC India has sought to caution members to the possibility of a delay in realisation of payments from Russia, which is the biggest export market for Indian engineering goods among the CIS countries.
Exclusion of Russia from the SWIFT payment system would mean delayed payment realisation for exporters, chairman Mahesh Desai said in a release on India’s engineering goods export clocking 31% year-on-year increase in February.
The geo-political situation involving Russia and Ukraine in recent weeks is giving rise to uncertainty. While the impact on engineering goods exports is yet to be assessed, the Russia-Ukraine crisis has already pushed up prices of key commodities, especially crude and metals. “The shipping cost which has already been going through the roof would further hurt the exporters,” he said.
Sources in EEPC said India’s engineering goods exports to Russia was $544.4 million in 2018-19 and increased to $740.9 million the next fiscal. In 2020-21, the exports declined 14.1% to $636.6 million. For the 10 months ended January this fiscal, the exports almost doubled to $789.8 million from $404.3 million in the year-earlier period.
According to Mr. Desai, in the event of the crisis prolonging, there could be spillover effects elsewhere too with more impact on trade. “We hope to continue our growth run should geopolitical tensions ease normalcy returns," he said.
The estimated value of India’s engineering exports in February is $9.2 billion with demand from key markets driving growth. EEPC is pursuing a target of $107 billion for this fiscal and up to January the engineering exports total $91 billion. In 2020-21, engineering exports from the country was about $73.11 billion.
