Engineering exports, which account for a major chunk of total outbound shipments, dipped by 2.7 per cent to USD 5.02 billion in February due to global demand slowdown and lull in domestic manufacturing activities.
Engineering exports in February last year was USD 5.16 billion.
The overall exports contracted 3.67 per cent in February to USD 25.68 billion, after recording positive growth for seven consecutive months.
However, the sector has registered a growth of 8.96 per cent at USD 55.5 billion for April-February period, a Commerce Ministry official said.
The sector is impacted by the global demand slowdown in markets such as the US and EU which account over 50 per cent of India's engineering exports.
The sector had put up poor performance in 2012-13 with a 3 per cent decline at USD 56.7 billion.
"The slowdown in the domestic manufacturing sector is proving to be big constraint in keeping the export momentum, especially in difficult global markets," Engineering Exports Promotion Council (EEPC) Chairman Anupam Shah said.
He said the pending duty refund claims are also acting as a major hurdle.
"The deceleration in exports in February instead of increase reflects inability of the Indian exporters, particularly those in the SMEs, to stay competitive in the wake of cash crunch due to pending claims of duty drawbacks worth over Rs 10,000 crore," he added.
Engineering exports include transport equipment, capital goods, other machinery/equipment and light engineering products like castings, forgings and fasteners.
