The West Asia war and closure of shipping routes led to severe contraction in the engineering sector’s exports to the region with shipments to the second biggest market of the United Arab Emirates (UAE) contracting 66.8% and to Saudi Arabia 45%.
The exports of engineering goods to the UAE fell to $ 237.4 million in March from $ 714.8 million in the same period of the previous year. Saudi Arabia exports fell to $ 247.7 million in the previous month from $ 450.5 million in March 2025.
Regional Disruptions
“With the UAE being a trade-transshipment hub, several Indian exporters have warehouses there for further trade with Europe, Africa, and the USA. The recent geopolitical conflicts in the region have also impacted these warehouse activities,” chairman of Engineering Export Promotion Council (EEPC) Pankaj Chadha said.
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Despite the hit in key West Asian markets. overall engineering sector exports during the month were up 1.13% to $ 10.94 billion. During 2025-26 engineering sector exports were up 4.86% to $ 122.43 billion.
The share of the sector in the total merchandise exports in 2025-26 was 27.71%. The share in March 2026 was even better at 28.11%. “Going forward, the combination of sectoral resilience, market diversification, and targeted policy interventions will remain critical for sustaining export momentum and progressing towards long‑term export targets,” Chadha said.
Diversification Gains
The US remained the biggest market for Indian engineering exports despite the additional tariff pressures, which were as high as 50% between September and January. The exports to the US grew 2.3% to $ 19.6 billion.
Other high growth markets included Germany where shipments were up 14.6% on year to $ 4.96 billion, UK up 18.2% to $ 4.74 billion, China growing 32.4% to $ 3.53 billion and Korea expanding 16.7% to $ 3.03 billion. Netherlands, Vietnam, Spain and Belgium markets were other high performance markets.
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Exports of iron and steel and their products grew 7% to $ 20.67 billion. Other metal products exports were up 19% to $ 14.19 billion. Exports of industrial machinery were up 7% to $ 15.36 billion. Electrical machinery exports grew 7% to $ 15.3 billion.
Auto sector exports were up 14.3% to $ 26.8 billion. This sector had the highest share in the engineering sector exports. Within the auto sector, motor vehicle and car exports were up 23% to $ 11.08 billion. Two-wheeler and three-wheeler exports grew 24% to $ 3.9 billion while auto component exports were up 5% to $ 8.56 billion. Tyre exports grew 4% to $ 3.20 billion. Exports of construction machinery were up 20% to $ 3.6 billion.
TOPICSWest AsiaThis article was first uploaded on April twenty-three, twenty twenty-six, at forty minutes past eleven in the night.