Introduction
The engineering sector plays a pivotal role in India’s economic growth and export performance, contributing about 3% to GDP and accounting for around 24% of total merchandise exports and around 40% of manufacturing exports. It represents the largest segment within India’s export basket and reflects the strength of the country’s industrial base. Engineering exports have shown resilience and steady expansion with the upward momentum continued in Q1 FY27 (April–June 2026), reaching Rs. 3.24 lakh crore (US$ 34.14 billion) from US$ 122.43 billion in FY26, registering 18.39% year-on-year growth over Q1 FY26. This strong performance indicates sustained global demand for Indian engineering goods despite continuing global economic uncertainties. The sector spans a wide range of products including capital goods, machinery, metals, transport equipment, and industrial components, supporting both domestic industrial development and global trade integration.
India's finished steel production (Million Tonnes)
Source: Ministry of Steel
This consistent growth underscores the sector’s increasing global competitiveness and its critical role in driving manufacturing expansion, generating foreign exchange earnings, and strengthening overall economic development in India.
India became a permanent Washington Accord (WA) member in June 2014. It is now part of an exclusive group of 17 countries that are permanent signatories of the WA, an elite international agreement on engineering studies and the mobility of engineers. India's engineering sector has witnessed remarkable growth over the last few years, driven by increased investment in infrastructure and industrial production. Infrastructure investment has also continued to strengthen. Under Union Budget 2026-27, public capital expenditure was increased to Rs. 12.2 lakh crore (US$ 129.26 billion), up from Rs. 11.2 lakh crore (US$ 126.74 billion) in FY26, supporting continued infrastructure development and demand for engineering goods. The Budget also proposed seven high-speed rail corridors, a new dedicated freight corridor and 20 new national waterways, creating further opportunities for engineering and capital goods industries.
Export Trend
India's engineering exports trend (US$ billion)
Source: Engineering Export Promotion Council of India (EEPC), Ministry of Commerce
India’s engineering exports maintained strong momentum in FY26, increasing by 4.52% to Rs. 10.82 lakh crore (US$ 122.43 billion), compared with Rs. 10.10 lakh crore (US$ 116.75 billion) in FY25. The sector continued its positive trajectory in Q1 FY27 (April–June 2026), with engineering exports reaching Rs. 3.24 lakh crore (US$ 34.14 billion), registering 18.39% year-on-year growth over the corresponding period of FY26. The sector continued to outperform overall merchandise exports, which grew by 17.04% during April–June FY27, compared with 18.39% growth in engineering exports. Engineering goods accounted for 26.69% of total merchandise exports cumulatively during FY27 (April–June 2026), while their share stood at 27.67% in June 2026, reinforcing their position as a key contributor to India’s export basket. The overall export performance was supported by broad-based growth across major engineering segments.
During FY27 (April–June 2026), exports of iron and steel stood at Rs. 27,884.90 crore (US$ 2.94 billion), during April–July FY27 Other Non-Ferrous Metals and their products rose to Rs. 3,751.03 crore ( US$ 397.44 million, Industrial Machinery exports were Rs. 1.01 lakh crore (US$ 10.66 billion)), with 14.53% YoY growth, and electrical machinery grew to Rs. 60,403.20 crore (US$ 6.40 billion), registering 22.30% year-on-year growth.
Additionally, the automobile sector recorded strong growth, with exports rising to US$ 26.83 billion, while other engineering products expanded to US$ 15.58 billion. This growth was driven by increased global demand, particularly in metals, machinery, and transport equipment, indicating sustained strength in India’s engineering manufacturing and export capabilities.
Export Destinations
India’s engineering exports reached Rs. 3.23 lakh crore (US$ 34.14 billion) during April–Jun 2026 (FY27), registering a year-on-year growth of 18.39%. The export base remains well diversified, with the top 10 destination countries accounting for Rs. 1.54 lakh crore (US$ 16.23 billion), or 47.53% of total engineering exports during the period. This reflects India’s strong presence across key global markets and its growing integration into international manufacturing supply chains.
Among key destinations, the USA remained the largest market, with engineering exports valued at Rs. 52,758 crore (US$ 5.59 billion) during Q1 FY27, followed by the UAE at Rs. 19,281.53 crore (US$ 2.03 billion), the UK at Rs. 12,775.70 crore (US$ 1.35 billion) and Germany at Rs. 12,640.12 crore (US$ 1.33 billion). Other major destinations included Singapore at Rs. 11,326 crore (US$ 1.20 billion), Saudi Arabia at Rs. 10,004.13 crore (US$ 1.06 billion), China at Rs. 9,438 crore (US$ 1.00 billion), Mexico at Rs. 8,777 crore (US$ 0.93 billion), South Korea at Rs. 8,305 crore (US$ 0.88 billion) and Sri Lanka at Rs. 8,022 crore (US$ 0.85 billion). The strong demand across these markets reflects India’s growing role as a supplier of engineering goods to diverse manufacturing and industrial economies.
Country wise share of India's engineering goods export FY27 (April-June 2026)
Source: Ministry of Commerce
Government Initiatives
The government of India has implemented various export promotion schemes, such as the Zero Duty Export Promotion Capital Goods (EPCG) scheme, Towns of Export Excellence (TEE), Market Access Initiative (MAI), etc. These schemes are aimed at encouraging the exporter and to help increase the revenue from international markets. Also, schemes such as duty exemption, advance authorization, duty-free import, rebate on service tax, etc. have been implemented to ease raw material imports. The Indian Engineering Exposition (INDEE), a brand of EEPC India, is one of the largest engineering expositions in the world.
Apart from the specific schemes mentioned above, the Government of India has taken several initiatives to support and enhance the competitiveness of the domestic engineering goods manufacturing firms such as the "Make in India" initiative, PLI scheme for Automobile, and Auto components, PLI scheme for National Programme on Advanced chemistry cell (ACC) Battery Storage, FAME INDIA II scheme, Capital goods scheme, Industry 4.0.
The Government of India, along with the Engineering Export Promotion Council, frequently organizes the International Engineering Sourcing Show (IESS) with the main objective of promoting India's image and providing a platform for Indian exporters to showcase their strengths and capabilities in an emerging market. This has become a unique platform between Indian and overseas engineering firms with B2B meets, thematic seminars and exclusive country and state sessions, bilateral forums.
Government Body
Engineering Export Promotion Council (EEPC)
EEPC India is a premier trade and investment promotion organisation for the Indian engineering sector, sponsored by the Ministry of Commerce & Industry, Government of India. Established in 1955, EEPC India currently has a membership base of around 9,500 companies, with approximately 60% from the MSME segment. The council serves as an interface between the engineering industry and the Government, contributes to policy discussions, and supports Indian engineering exporters through buyer-seller meets, reverse buyer-seller meets, overseas exhibitions, trade delegations, market intelligence and other export-promotion activities.
FAQs
The USA was the largest destination for India’s engineering goods exports during Q1 FY27 (April–June 2026), with exports of US$ 5.59 billion. The UAE, UK, Germany, Singapore, Saudi Arabia, China, Mexico, South Korea and Sri Lanka were other major markets, highlighting the diversified reach of India’s engineering exports.
India’s engineering exports reached US$ 122.43 billion in FY26, registering 4.52% growth over FY25. Momentum strengthened in Q1 FY27, with engineering exports reaching US$ 34.14 billion and growing 18.39% year-on-year, outperforming overall merchandise export growth during the period.
India’s engineering goods exports cover metals, machinery, transport equipment and industrial components. In Q1 FY27, industrial machinery exports reached US$ 10.66 billion, electrical machinery US$ 6.40 billion and iron and steel US$ 2.94 billion, while automobile and other engineering products also recorded significant export values.
The engineering industry is a major driver of India’s merchandise exports, accounting for around 24% of total merchandise exports and approximately 40% of manufacturing exports. In Q1 FY27, engineering goods accounted for 26.69% of merchandise exports, reflecting the sector’s importance to India’s manufacturing base and export performance.
Industrial machinery, electrical machinery, automobiles, iron and steel and other engineering products are among the major export segments. During FY27, industrial machinery exports reached US$ 10.66 billion and electrical machinery exports US$ 6.40 billion, supported by demand for machinery, metals and transport equipment in international markets.
The provided content does not include state-wise engineering export values or identify leading states by engineering exports. It therefore does not support a state-level ranking. The document instead highlights India’s broader engineering manufacturing base and its integration with domestic industrial development and global trade.
Government support includes the Zero Duty EPCG Scheme, Towns of Export Excellence, Market Access Initiative, duty exemption and Advance Authorisation schemes. Broader initiatives such as Make in India, PLI schemes for automobiles and auto components, the ACC Battery Storage PLI, FAME India II, the Capital Goods Scheme and Industry 4.0 also strengthen engineering manufacturing.
Indian engineering exporters are expanding internationally through a diversified destination base, overseas exhibitions, trade delegations, buyer-seller meets and international sourcing platforms. The International Engineering Sourcing Show provides B2B meetings, thematic seminars and bilateral forums, helping Indian companies showcase capabilities and build overseas business relationships.
EEPC India supports the Indian engineering industry through buyer-seller meets, reverse buyer-seller meets, overseas exhibitions, trade delegations and market intelligence. With around 9,500 member companies, including a significant MSME base, it also acts as an interface between engineering exporters and the Government on policy and export-related matters.
India’s engineering export market has scope for continued expansion, supported by infrastructure investment, manufacturing growth and strong global demand. Q1 FY27 engineering exports grew 18.39% year-on-year, while public capital expenditure and new infrastructure projects are expected to support demand for engineering goods and capital equipment.
Vanijya Bhawan
1st Floor, International Trade Facilitation Centre,
1/1, Wood Street
Kolkata - 700016
West Bengal
India
Tel.:+91-33-22890651/ 52
Fax: +91-33-22890654
Email: eepcho@eepcindia.net
Website: www.eepcindia.org
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