US-bound Indian Engineering Goods Exports Increase by 4.6% in May, Reaching $1.74 Billion
New Delhi's Engineering Exports Flourish Despite Tariff Hikes
India's exports of engineering goods to the US soared by 4.6% to a whopping $1.74 billion in May 2025, bucking the trends set by former US President Donald Trump's tariff hikes. This resilience was witnessed not just in the US, but also in exports to Europe, with positive growth seen in Germany, the UK, and the Netherlands.
However, a downward trend was evident in key Middle Eastern markets such as the UAE, Saudi Arabia, and Turkey, which experienced a significant decline in engineering goods imports from India. The decline can be attributed to escalating geopolitical tensions and worries about logistics in the region. The export of aluminum and its products was hit particularly hard due to increased competition.
Despite this fall, engineering goods accounted for a staggering 25.53% of India's total merchandise exports during this period, a testament to the expanding manufacturing base and growing presence of high-value goods in India's export basket.
Cumulatively, India's engineering exports recorded a robust 4.77% growth to $19.40 billion during the April-May period of 2025-26, compared to the same period of the previous financial year. The growth in engineering exports was especially noteworthy in April, as they surged by 11.28% to $9.51 billion from the previous year.
In May 2025, 26 out of 34 engineering panels experienced positive year-on-year growth, while 8 panels, including primarily non-ferrous metals like aluminum, zinc, lead, tin, machine tools, and aircraft and spacecrafts, ship and boats, observed a decline in exports. North America remained the top export destination, followed by the EU and WANA (West Asia & North Africa) in April-May 2025.
The driving force behind this resilience is the strong growth in specific sectors, such as steel and iron, industrial machinery, electrical machinery and components, and auto components. While the US imposed a 25% duty on steel, aluminum, and related products in March 2025, Indian exports continued to grow due to competitive pricing, quality, or supply chain adjustments.
Moreover, the government's support in developing new technologies and exploring new markets, as well as the diversification of export destinations, have played crucial roles in sustaining and boosting exports.
In conclusion, India's engineering goods exports flourished in May 2025 despite tariff hikes, with robust sectoral growth in steel, machinery, and auto parts exports, strong government backing, and strategic market diversification contributing to this success.
In the context of the resilience displayed by India's engineering exports in May 2025, the growth was particularly observed in segments such as steel, industrial machinery, and automotive components, thereby demonstrating the robustness of India's engineering industry in the face of tariff hikes in the finance sector, particularly in the US. Furthermore, this expansion in the engineering exports sector significantly contributed to a sizable portion of India's total merchandise exports, highlighting the growing impact of the business sector in the Indian economy.
