India’s engineering exports outpace merchandise trade growth

India’s engineering exports outpaced merchandise trade growth in April-February FY26, reaching US$111.49 billion, up 5.25% from US$105.94 billion a year earlier. Overall merchandise exports rose 1.84% to US$402.93 billion, lifting India’s engineering exports’ share of merchandise exports to 27.67%.

How did India’s engineering exports outpace merchandise trade growth?

India’s engineering exports grew faster because shipments increased while aggregate merchandise exports expanded modestly over the first 11 months of FY26. India’s engineering exports rose by US$5.56 billion, from US$105.94 billion in April-February FY25 to US$111.49 billion in April-February FY26. Overall merchandise exports increased by US$7.27 billion, from US$395.66 billion to US$402.93 billion, but their percentage growth was 1.84%, compared with 5.25% for India’s engineering exports.

India’s engineering exports consequently gained weight within merchandise trade. India’s engineering exports accounted for 27.67% of total merchandise exports in April-February FY26, compared with 26.77% in April-February FY25, an increase of 0.90 percentage points. In February 2026 alone, India’s engineering exports were US$10.36 billion, 12.90% above US$9.17 billion in February 2025, while overall merchandise exports declined 0.82% to US$36.61 billion.

The February 2026 result extended a four-month period in which India’s engineering exports remained above US$10 billion. The monthly pattern was uneven: exports fell 16.71% year on year in October 2025 to US$9.37 billion, then increased 23.81% in November, 1.29% in December, 10.37% in January 2026 and 12.90% in February. Continued growth through the fiscal year therefore depends on gains continuing after the October decline.

Which products drove India’s engineering exports in FY26?

Metal products, machinery and automotive products were the stated drivers of India’s engineering exports in April-February FY26. Copper and copper products recorded the fastest reported cumulative growth, at 52.53%, followed by motor vehicles and cars at 24.72%. Iron and steel exports rose 11.54%, industrial machinery increased 10.47%, electrical machinery grew 7.9%, and aluminium and its products rose 2.61%.

Growth was broad but not universal across the 34 engineering product panels, which are product-group classifications used in the trade analysis. In February 2026, 27 of 34 panels recorded year-on-year growth, while seven declined, including internal-combustion engines, machine tools, aircraft and spacecraft, medical and scientific instruments, cranes, lifts and winches, prime mica, and project goods. The same count, 27 growing and seven declining, applied cumulatively in April-February FY26, although the declining group included nickel products, ships, boats and floating structures, hand tools and cutting tools.

FY25 composition shows the export base affected by these product movements. Capital goods, meaning equipment used in production, made up 62% of India’s engineering exports in FY25. Primary iron, steel and related products accounted for 17%, non-ferrous metals and products for 10%, and consumer durables for 11%. Growth in metals, industrial machinery and motor vehicles therefore applies to categories with a large combined share of engineering exports.

How concentrated are India’s engineering export markets?

India’s engineering exports remain concentrated in large markets, with North America accounting for 20% of April-February FY26 shipments and the European Union accounting for 18%. West Asia and North Africa, or WANA, supplied a further 15%, while the Association of Southeast Asian Nations, or ASEAN, represented 11%. Those four regions together accounted for 64% of India’s engineering exports by the reported shares.

The United States was the largest individual market, importing US$17.77 billion of Indian engineering goods in April-February FY26, up 2.9% from US$17.27 billion a year earlier. The United Arab Emirates imported US$7.22 billion, down 4.5%, and Saudi Arabia imported US$4.65 billion, down 10.4%. Germany rose 14.7% to US$4.51 billion and the United Kingdom increased 20.0% to US$4.30 billion, partly offsetting declines in two major WANA destinations.

Concentration is also evident by country: the top 25 destination countries accounted for US$83.22 billion, or more than 74%, of India’s engineering exports in April-February FY26. Within that group, Vietnam rose 38.0%, China 25.4%, South Korea 19.3%, Spain 28.4% and Sri Lanka 52.8%. Turkey fell 36.3%, Indonesia declined 18.8%, Bangladesh dropped 10.7% and France decreased 7.3%, showing that export growth differed widely across major destinations.

Which regions supported growth and which held it back?

The European Union, Northeast Asia and Sub-Saharan Africa supported India’s engineering exports in April-February FY26. European Union exports increased 8.9% to US$19.92 billion, Northeast Asia grew 17.9% to US$9.34 billion, and Sub-Saharan Africa rose 14.9% to US$9.06 billion. Latin America also increased 14.2% to US$6.38 billion, while Oceania grew 26.5% to US$1.56 billion.

North America remained the largest regional market in value terms but grew more slowly, by 2.4% to US$22.13 billion. WANA contracted 3.8% to US$17.08 billion, Other Europe fell 4.2% to US$6.54 billion, and the Commonwealth of Independent States, or CIS, decreased 5.4% to US$1.56 billion. The overall 5.25% increase depended on gains in the European Union, Asian markets, Africa and Latin America exceeding declines in WANA, Other Europe and the CIS.

Government export-promotion measures listed for the sector include the Zero Duty Export Promotion Capital Goods scheme, Towns of Export Excellence and the Market Access Initiative. The source also identifies advance authorisation, duty exemption, duty-free import and service-tax rebate arrangements as measures intended to ease raw-material imports. The reported April-February FY26 trade data do not quantify the contribution of any individual scheme to India’s engineering exports.

Conclusion

India’s engineering exports gained share within merchandise trade because their 5.25% growth to US$111.49 billion exceeded the 1.84% increase in overall merchandise exports during April-February FY26. Metals, machinery and automotive products supported the increase, while North America, the European Union and the United States remained central to export value and the top 25 destinations supplied more than 74% of the total.

The next measure to watch is whether India’s engineering exports maintain growth after February 2026, following four consecutive months above US$10 billion. The disclosed data show cumulative declines in WANA, Other Europe and the CIS, alongside seven of 34 product panels recording declines; sustained gains in the European Union, Northeast Asia and expanding country markets would be needed to offset those movements.