February trade data: Encouraging numbers, but geopolitical tensions cloud outlook, says EEPC’s Chadha

Engineering goods exports maintained their growth momentum in February 2026, with total shipment value at $10.36 billion, up 12.90% from $9.17 billion in the corresponding month last year. Cumulatively, engineering goods exports during the April-February period of the current financial year 2025-26 stood at $111.49 billion, compared with $105.94 billion in the same period of the previous fiscal year, registering a year-on-year growth of 5.24%.

“While the numbers are quite encouraging, the road ahead seems to be challenging in the wake of escalating geopolitical tensions. The engineering industry is currently facing multiple challenges on the external front and all at the same time. India and the US have agreed to an interim trade framework and are negotiating a broader Bilateral Trade Agreement (BTA), which may benefit India’s engineering exports. However, conflicts in West Asia and the Middle East have increased global energy volatility, threatening economic activity and trade. The impact of energy market volatility has so far been limited in India, but there is growing uncertainty about price stability going forward. There are early signs of input costs going up,” says Pankaj Chadha, Chairman, EEPC India.

“The world seems to be changing rapidly. The trade outlook just a month back appeared to be stable, but now it seems clouded. The engineering exports sector cannot remain insulated from the happenings in West Asia and the Middle East. It is important to note that the UAE and Saudi Arabia are our second and third biggest export markets, respectively, after the US. The ongoing conflict is also expected to take a toll on our exports to West Asia and North Africa, considering the UAE and Saudi Arabia are gateways to those markets,” adds Chadha.


Despite consecutive challenges, engineering exports are projected to exceed the previous record of $116 billion in FY26, says Chadha.