Engineering Export Promotion Council (EEPC) said that India's engineering exports are "critically dependent" on the US and EU markets.
"While our shipments to the EU grew at 10.33 per cent to USD 1.09 billion in September, fresh economic troubles in major European economies like Germany and France are a big cause of worries for months subsequent to September," it said in a statement.
It said that a sharp drop in India's engineering exports have been reported at Rotterdam and Antwerp ports, the cargo hubs for Northern and Western Europe.
It said that exports to the Netherlands through Rotterdam saw a huge decline of 51 per cent in September.
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"...We may face problems going forward...Things may change for worse in the coming months," it added.
Industrial machinery, aircraft parts, auto components are the major engineering exports to the EU.
India's exports grew marginally by 2.73 per cent in September, but a surge in gold imports pushed the trade deficit to about 18-months high of USD 14.2 billion.