The Association of Engineering Exporters EEPC India has tried to warn members about the possibility of a delay in the realization of payments from Russia, which is the largest export market for Indian engineering goods among CIS countries.
Excluding Russia from the SWIFT payment system would mean delayed payment processing for exporters, Chairman Mahesh Desai said in a press release on India’s exports of tech goods, which rose 31% yoy in February.
The geopolitical situation surrounding Russia and Ukraine in recent weeks has created uncertainty. While the impact on exports of engineering products has yet to be assessed, the Russia-Ukraine crisis has already pushed up the prices of key commodities, particularly crude oil and metals. “The shipping costs that have already gone through the roof would hurt exporters even more,” he said.
Sources in EEPC said India’s exports of engineered goods to Russia amounted to US$544.4 million in 2018-19 and will rise to US$740.9 million in the next fiscal year. In 2020-21, exports fell by 14.1% to $636.6 million. In the 10 months ended January of this fiscal year, exports nearly doubled to $789.8 million from $404.3 million in the same period last year.
According to Mr. Desai, if the crisis were to prolong, there could be spillovers elsewhere with a greater impact on trade. “We hope to continue on our growth trajectory if geopolitical tensions facilitate a return to normal,” he said.
The estimated value of Indian machinery exports in February is US$9.2 billion, with demand from key markets driving growth. EEPC has a target of $107 billion for this fiscal year and engineering exports are $91 billion through January. In 2020-21, machinery exports from the country were about US$73.11 billion.