Exports of engineering goods, which accounts for 20 per cent of the overall exports of the country, is likely to decline by 20-30 per cent by the end of this fiscal in the backdrop of global financial crisis.
"We will see decline in the export of engineering goods from January and the decline can range anywhere from 20 to 30 per cent for the sector in the Q4 period of the year," Engineering Export Promotion Council (EEPC) Chairman Rakesh Shah told PTI.
Though overall exports from the country have started declining in the backdrop of global credit crisis, the export of engineering goods will feel the heat a little later, he said.
Exports will be down on several counts including lower demand. "Besides demand decline, Indian companies have adopted caution in offering credit to the US and European countries," Shah said.
US and Europe account for about 40 per cent of the total India's engineering exports.
"The order book for the quarter has not declined much and there is no major news of order cancellation," Shah said.
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"In the Q3 period ended December, export figures will witness a growth in exports of just 10-12 per cent over the same period last year. The sector in the past was expanding at a compounded rate of 30-35 per cent annually," Shah said.
Exporters are reducing the quantum of credit between 30-40 per cent to their clients in the US and Europe and this in turn affects exports.
India's total exports during October declined by 15 per cent over the same period last year. The exports target for this fiscal is set at $200 billion.