There is a sliver of good news on the exports of engineering goods. Exports of this sector recorded a near five per cent year on year growth, but there are early signs of stress visible as indicated by a decline in exports in August owing to US penal tariffs.
Engineering Export Promotion Council chairman Pankaj Chadha, said on Wednesday the annual growth was encouraging given the fact that industry was facing severe challenges, including threat of US tariffs and increasing logistics and shipping costs due to geo political tensions.
Exports recorded 4.91 percent growth in August 2025 and recorded US$9.9 billion, as against US$9.4 billion in the same month last year.
What is more, the US remained the top destination for engineering exports from India with shipments rising 7.2% year-on-year to US$1.68 billion in August this year.
However, on a month-on-month basis, India’s engineering exports, declined by around 5% as July had seen engineering shipments crossing US$10 billion to reach US$10.4 billion. This over-the-month decline in exports may be considered as an early sign of stress, given the tariff escalation imposed by the US, Chadha said.
Which is why, the EEPC Chairman urged for support from the government for betting marketing Indian goods abroad, as diversification of products and destinations was the key.
India’s annual engineering exports to the US average around US$20 billion, which remain exposed to the 50% tariff imposed by the Trump administration.
But, said, Chadha, the positive growth in August is very encouraging for the exporting community, given that the industry has been facing significant global challenges, especially the threat of reciprocal tariffs from the US and increasing logistics and shipping costs due to growing geopolitical tensions.
“Therefore, it is a significant achievement for the exporting community. In these difficult times, the FTA signed with the UK will become a major benefit to the industry as it will further pave our presence in the UK market,” he said.
Need government support: EEPC
, “As India negotiates another FTA with the EU, we hope it will address the non-tariff barrier concerns, such as CBAM, to make the FTAs truly effective. Additionally, we urge the government to provide us with support for the better marketing of Indian products abroad, as diversification of products and destinations is key. The support of the government will also be crucial to address the issues of export credit, rising raw material prices, and rising logistics costs,” the EEPC official said.
Among the key markets for Indian engineering exports, which saw positive growth during August 2025, were the UK, Germany, UAE, Italy, South Africa, Bangladesh, France, and the Netherlands.
Engineering shipments to China declined 7.4% year-on-year to US$242.5 million in August this year. Engineering exports to Turkey saw a massive drop of 42.3% in August 2025, sliding to US$ 162 million from US$280.6 million in August 2024.
Shipments to Indonesia also saw a huge decline during the month under review. Engineering exports to Indonesia plummeted 65.6% year-on-year to US$103.6 million in August 2025 from US$301.7 million in August 2024.
Engineering goods exports to Singapore and Saudi Arabia also declined sharply in August 2025.
On a cumulative basis, engineering exports recorded 5.86% year-on-year growth during the first five months of fiscal 2025-26 as they went up to US$49.24 billion in the April-August period of 2025-26 from US$46.52 billion during the same period last fiscal.
The share of engineering in total merchandise exports rose to 28.2% in August 2025 from 28% in July 2025. The share was recorded at 26.74% on a cumulative basis during April-April-August period of 2025-26.
In August 2025, as many as 27 out of 34 engineering panels witnessed positive year-on-year growth. Automobile and auto component exports registered strong growth, rising 21% year-on-year to US$2.38 billion in August this year.
Engineering panels, including nickel & product, electrical machinery & equipment, aircraft & spacecraft, ship & boats, medical & scientific instruments & hand tools, and cutting tools, witnessed a decline in exports during August 2025 vis-à-vis August 2024.
On a cumulative basis, 28 out of 34 engineering panels recorded positive growth during the April-August period of 2025-26, and the remaining six engineering panels, including non-ferrous sectors, aircraft & spacecrafts, and ships & recorded negative growth.
Region-wise, North America maintained its spot as the number one export destination with a share of 21% followed by the EU (18%) and WANA (14%) in April-August 2025.