The escalating violence in strife-torn Iraq has taken a toll on the country's engineering exports to the West Asian nation as outbound shipments plummeted by 54.30 per cent to USD 9.14 million in May 2014 as against USD 20 million in same month last year.
According to engineering exporters' body EEPC India, the exports during the first two months of the current fiscal (April-May 2014) slumped 23.49 per cent to USD 28.65 million from USD 37.49 million in the corresponding months of 2013.
"There is a clear negative growth of our exports to Iraq. When the country is in the middle of war, it is understandable that the economic activity has gone in for complete disarray. Moreover, the engineering items are not of day-to-day use for the Iraqi people," EEPC India Chairman Anupam Shah said.
Violence has claimed the lives of 2,417 Iraqis in June, making it the deadliest month so far this year, the United Nations said today, underlining the daunting challenge the government faces as it struggles to confront Islamic extremists who have seized large swathes of territory in the north and west.
Shah said in the midst of a full scale war between the government and the militants, the logistics as well as the entire payment system of shipments has been disrupted.
"In this scenario, I do not think our exporters are left with much confidence to do business there," he added.
However, even before the war had escalated into full scale, engineering exports to Iraq had started decelerating. From USD 594 million in 2012-13, the engineering shipments saw a sharp decline to USD to 326 million in 2013-14, EEPC said.
"Unfortunately, the geo-political situation in the Middle East, which is such an area of strategic interest to India's business and economy has turned negative," Shah said.
India exports iron & steel, electricals and automobiles among others to Iraq.
