Whalesbook
India's engineering exports are strategically diversifying to meet a $250 billion target by 2030, as outlined by the Engineering Export Promotion Council of India. Despite global trade challenges, exports saw a 2.93% year-on-year increase to $10.11 billion in September 2025, driven by growth in regions like Sub-Saharan Africa, ASEAN, and Latin America, alongside continued demand from traditional partners. Policy support and a shift towards high-value, technology-driven goods are crucial for this ambition.
India's engineering export sector is at a pivotal moment, aiming to achieve a significant target of $250 billion in exports by 2030, contributing substantially to the nation's overall $1 trillion export goal. This ambition is being driven by a strategic shift towards market diversification, adapting to evolving global supply chains and the rise of new economic hubs in the Global South.
Recent data from the Engineering Export Promotion Council of India (EEPC) indicates resilience, with engineering goods exports growing by 2.93% year-on-year to $10.11 billion in September 2025. This positive trend, even amidst global trade uncertainties, highlights the sector's inherent strength and the success of diversification efforts. Shipments to emerging markets such as Sub-Saharan Africa, ASEAN nations, and Latin America have shown marked increases. Simultaneously, demand from established trading partners like the United Kingdom, Germany, and Japan remains robust.
The growing trade with regions like Sub-Saharan Africa and ASEAN underscores the increasing importance of South-South trade, as observed by UNCTAD. For India, this presents a vital opportunity to strengthen trade ties within the Global South while also expanding its reach in developed markets.
The 'U.S.+Many' approach is central to this strategy, which involves maintaining export links in the United States market while systematically developing alternative markets globally. Latin America, in particular, is identified as a lucrative region, with countries like Mexico, Chile, and Peru emerging as key growth hotspots for Indian engineering goods. India's ongoing Free Trade Agreement (FTA) discussions with Chile and Peru, and potential trade engagement with Mexico, are expected to solidify these alliances. Further, discussions with the European Union aim to finalize an FTA, promising access to advanced markets, fostering technology collaborations, and enhancing the competitiveness of Indian engineering exports.
Policy support from the domestic front is deemed essential to complement market diversification. Measures such as enhanced export credit facilities, interest subvention for exporters, and revised duty drawback schemes are critical to help Indian exporters navigate tariff shocks and global challenges. Such interventions will provide a competitive edge and ensure Indian engineering products meet global standards.
Beyond diversification, the sector needs to ascend the value chain by increasing the share of high-end, technology-driven, and R&D-focused goods. This transition from volume-driven to value-driven exports, focusing on capability leadership over cost efficiency, will be key to unlocking a new growth cycle. Collaboration among industry, government, and trade bodies is crucial to realize this next wave of growth.
Impact
This strategic shift is poised to significantly boost India's export economy, potentially leading to increased foreign exchange earnings, job creation, and overall GDP growth. It also enhances India's position as a reliable global manufacturing and export hub. The diversification strategy aims to insulate the sector from geopolitical risks and market volatility. Rating: 8/10.
Difficult Terms:
Global South: Refers to developing countries, often located in Asia, Africa, and Latin America, which are seen as increasingly influential in global trade and economic development.
South-South trade: Trade activities that occur between countries typically classified as developing nations or part of the Global South.
FTA (Free Trade Agreement): An agreement between two or more countries to reduce or eliminate barriers to international trade, such as tariffs and quotas, making it easier to trade goods and services.
ASEAN: The Association of Southeast Asian Nations, a regional organization comprising ten member states in Southeast Asia.
Sub-Saharan Africa: A geographic region of Africa comprising countries generally south of the Sahara Desert.
