The declining demand for steel in China has caused an export pinch in India, particularly in states like Andhra Pradesh and Maharashtra.
India Exim Bank deputy MD Deepali Agrawal says, “Andhra Pradesh and Maharashtra went flat-negative in their export growth in April-July 2024 because of this reason. Andhra Pradesh’s exports during Q1-FY25 declined by (-) 1.3%, while that of Maharashtra declined by (-) 3.2%, due to a drop in exports of select top exported products.
“Iron and steel are important exported products for both Andhra Pradesh and Maharashtra, which have recorded a sharp drop in Q1-FY25,” said Agrawal.
“Steel prices have steadily fallen in the wake of declining demand from countries like China. Declining prices coupled with competitive pressures from Chinese steel in the global market have significantly affected India's exports of steel over the recent months. Accordingly, exports of iron and steel from Andhra Pradesh and Maharashtra declined by (-) 29.9% and (-) 39%, respectively in Q1-FY25,” she explained.
What has also complicated the picture is the dip in spice exports. “Andhra Pradesh’s exports of spices have also recorded a steep decline in Q1-FY25. This could be attributed to the ongoing concerns related to quality of Indian spices in markets such as Hong Kong and Singapore,” said Agrawal.
“Influenced by the actions taken by Hong Kong and Singapore, imports of spices by China and several other ASEAN countries have taken a hit during the first quarter of FY25.”
As per data from DGCI&S, Andhra Pradesh’s exports of spices to its largest export destination viz China declined by (-) 31.2% y-o-y, while that to other top export destinations like Thailand, Indonesia, and Malaysia declined by (-) 49.5%, (-) 76.6%, and (-) 33.6%, respectively during Q1-FY25.
The ship and boat segment has also suffered reverses. “Andhra Pradesh’s exports of ships, boats and floating structures, and motor vehicles/cars, also recorded double-digit y-o-y declines of (-) 30.3% and (-) 57%, respectively during Q1FY25. Besides these, other key exported products such as marine products and drug formulations/biologicals also recorded slight y-o-y decline during Q1FY25,” said Agrawal.
Maharashtra’s exports of several other top products also witnessed a decline during Q1-FY25, including “pearls, precious and semi-precious stones (-) 15% y-o-y decline in Q1-FY25), residual chemicals and allied products ((-) 8.7%), ships, boats and floating structures ((-) 8.5%), and industrial machinery for dairy ((-) 0.2%) etc,” she added.
In contrast, Tamil Nadu’s exports in Q1-FY25 have increased by 12% driven by a broad-based increase across the majority of the exported products. “As per data from the DGCI&S, nearly 81.5% of Tamil Nadu’s export basket recorded a positive y-o-y growth during Q1-FY25,” she said.
“It is noteworthy that among the top 15 exported products from Tamil Nadu, which accounted for 67.4% of the state’s total exports in Q1-FY25, 11 recorded positive y-o-y growth during Q1-FY25, of which seven categories recorded robust double-digit export growth,” she said.
These include products such as telecom instruments, readymade garments of cotton, auto component/parts, readymade garments of other textile material, industrial machinery for dairy, injection moulding machinery and petroleum products.
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