Kolkata, Oct 30 (PTI) India's engineering goods exports maintained a growth trajectory for the fourth consecutive month in September, with a 2.93 per cent rise year-on-year to USD 10.11 billion, EEPC India said.

Despite a sharp 9.4 per cent decline in shipments to the US, the largest market for Indian exporters of engineering goods, the growth was achieved, it said.

While overall exports crossed the USD 10 billion mark for the second time this fiscal, the growth rate moderated from the nearly 5 per cent witnessed in August 2025, according to the Engineering Exports Promotion Council (EEPC).

The US, which remains the top destination for Indian engineering goods, saw imports drop to USD 1.4 billion in September from USD 1.55 billion in the same month last year, reflecting the "impact of punitive tariffs imposed by the Donald Trump administration", the exporters' body said in a statement.

Shipments to the second-largest market, the UAE, also declined to USD 636.86 million from USD 672.39 million a year ago.

However, a 14.4 per cent year-on-year jump in exports to China, which reached USD 302.21 million, and "decent growth" in shipments to ASEAN, North-East Asia, Sub-Saharan Africa, Latin America, and South Asia helped the sector stay in positive territory, it said.

EEPC India chairman Pankaj Chadha said it is a "good sign" that overall engineering exports grew despite the tariff-related challenges in the US market.

"In the coming years, South-South trade will be a major driver of global trade, and India is in the right direction as it negotiates key FTAs (free trade agreements) with Latin American countries such as Chile, Peru, and MERCOSUR (South American trade bloc) and GCC (Gulf Cooperation Council) countries," Chadha said.

He, however, flagged several challenges for the sector, including high raw material prices, lack of access to export funding, and export controls by other countries on critical raw materials, such as "the rare-earth export controls by China".

On a cumulative basis, engineering exports recorded a 5.35 per cent year-on-year growth during the first half of the 2025-26 fiscal, reaching USD 59.36 billion, up from USD 56.34 billion in the same period last financial year.

The share of engineering in India's total merchandise exports stood at 27.8 per cent in September 2025. PTI BSM BDC

Trade tariffs reduce shipments to a major market, but diversification and FTAs sustain engineering export growth. Trade policy measures materially influenced Indian engineering exports in September, with overall sectoral shipments growing despite a marked decline to the United States attributed to Trade Tariffs. Market diversification-stronger shipments to China and various emerging regions-helped offset the decline. Regulatory constraints noted include limited access to export finance, high raw material prices, and foreign Export Controls on critical inputs such as rare earths. Negotiation of free trade agreements and expansion of South-South trade are identified as strategic policy responses to mitigate tariff exposure and enhance supply-chain resilience.