Brexit likely to hit engineering exports: EEPC

MUMBAI: Since European Union accounts for nearly a fifth of India's engineering exports, the impending exit of the UK from the union is likely to have a deep impact on India, exporters said.

"EU, including UK, claims nearly one-fifth of the country's engineering exports to top 25 destinations, and therefore, any upheaval in the largest trading partner following Brexit would have an impact of great magnitude on the exporters who are already in a state of distress," engineering exporters' apex body EEPC India chairman T S Bhasin said in a statement today.

India's total engineering exports to top 25 destinations were around $ 7.6 billion for the April-May period of the current fiscal.

Of this, the EU members contributed $ 1.5 billion and the UK was at the top of the list, followed by Germany.

"Seven of our 25 destinations are from EU. So, any upheaval in the market as a result of political division will have wide economic ramifications on trade, investment and currency movement which should be a cause of worry for us," he said.

Bhasin further said that though a two-year window of negotiations for the exit of Britain is available, the current indications point towards extreme political stand by a divided British polity and the EU leadership.

India's engineering exports to UK during April-May were $ 372 million and for Germany, the shipments amounted to $ 339 million.

The other major trading partners are Italy with engineering shipments of $ 253 million, France $ 191 million, the Netherlands $ 141 million, Spain and Belgium of $ 121 million each.

"India too should keep a close watch on the unfolding situation and tweak its strategy on protracted India-EU Free Trade Agreement negotiations while opening fresh avenues of trade liberalisation with Britain," he said.

The government should also work out a strategy to find an effective solutions to deal with the emerging situation, Bhasin added.