New Delhi, July 6 (IANS) Any upheaval following Brexit will have a negative impact “of great magnitude” on India’s engineering exports, an Engineering Export Promotion Council of India analysis has shown.
“With the European Union, including the United Kingdom, claiming one-fifth of India’s engineering exports to top 25 destinations, any upheaval in the country’s largest trading partner following Brexit will have an impact of great magnitude on the exporters who are already in a state of distress,” the EEPC India paper said.
As per the latest data, India’s total engineering exports to top 25 destinations account for 75 per cent of the country’s total engineering product shipments, aggregated to $7.6 billion for the April-May period of the current fiscal.
Of this, the EU members contributed $1.5 billion, with the UK emerging as the number one destination among the EU members, followed by Germany, it noted.
“Seven of our 25 destinations are from EU. So, any upheaval in the entire market as a result of the political division with wide economic ramifications on the trade, investment and currency movement should be a cause of worry for us,” T.S. Bhasin, Chairman of the EEPC India, said.
He said though a two-year window of negotiations for the exit of Britain is available, the current indications point towards extreme political stand by a divided British polity and the EU leadership.
India’s engineering exports to the UK for the period under review were $372 million, and for Germany the shipments amounted to $339 million.
The other major trading partners are Italy with engineering shipments of $253 million, France $191 million, the Netherlands $141 million, Spain and Belgium $121 million each.
The EEPC India paper said China may take pro-active steps and peg its currency to its advantage and benefit from the emerging situation in the European market.
“India too should keep a close watch on the unfolding situation and tweak its strategy on the protracted India-EU Free Trade Agreement negotiations while opening fresh avenues of trade liberalisation with Britain,” Bhasin said.
He urged the government to work out the strategy in active partnership with different export segments so that an effective solutions to deal with the emerging situation be devised.