Indian engineering exports are likely to continue the current growth momentum even in 2011-12, predicts the Engineering Export Promotion Council (EEPC). For 2010-11, EEPC expects around US$42-44 billion (bn) exports.

The engineering industry, which constitute of 60-65% small players, witnessed significant revival from the beginning of 2010-11, after months of depression due to the global economic slump. Engineering exports stood at US$31 bn during April-November 2010, as against US$21 bn in the same period previous year, reveals industry data.

“The engineering export industry, comprising of many MSMEs, is currently upbeat, registering nearly 40% growth during April-September FY11 over that of the corresponding period in FY10,” says A A Kazmi, director (North India) at EEPC to a Bizxchange correspondent.

“Among many engineering products, machinery exports recorded close to 250% growth in the first two quarters of 2010-11,” added Kazmi.

According to EEPC, the export drivers include maturing markets worldwide, recent amendments to the country’s Foreign Trade Policy and constant government impetus in the form of policy packages.

Upgrade technology

Amid such brighter moments, use of obsolete technology by many MSME engineering players has emerged as a matter of concern for industry players.

“We experienced good growth since the beginning of FY11 and expect the growth trend to roll on to this year. Strong demand in the global market has driven the export market,” said Mohammed Javed, proprietor of Bengaluru-based Jh Enterprises, a small-sized equipment and machinery exporter. He did not divulge any information on the use of technology.

Upgradation of technology in production units, MSME units in particular, is critical to sustain the current growth trend, opines Aman Chadha, chairman of EEPC. The reason being MSMEs dominate the low-value engineering exports.

In an endeavour to help MSMEs move up the value chain, EEPC has also requested the Centre to introduce a Technology Upgradation Fund Scheme (TUFS) for the growing engineering sector.

If implemented, TUFS can take engineering exports to nearly US$92 bn by 2013-14, eventually turning India into a leading engineering export hub by 2020.