India's Engineering Exports: Strategic Insights for Sustainable Global Expansion

India's engineering sector encompasses a broad array of high-value products, prominently including defense equipment, aerospace components, automotive parts, industrial machinery, and advanced electrical goods. These products form the backbone of India's technological capabilities and strategic export potential, significantly contributing to both economic growth and national security.

The engineering sector represents a substantial portion of India's export economy, serving a diverse and global market spanning over 190 countries. This comprehensive report provides an in-depth analysis of the sector’s recent performance trends, current operational practices, key inefficiencies and bottlenecks, and identifies strategic opportunities for technological innovation and operational improvements.

Among the engineering exports, defense-related products account for approximately 5% of the total segment, driven by India's growing indigenous defense manufacturing initiatives and defense offset exports. The aerospace segment contributes around 3%, largely from high-precision components, subassemblies, and parts for international aviation and space missions. Meanwhile, home and commercial security solutions (such as locks, vaults, and surveillance equipment) comprise nearly 2% of engineering exports, primarily directed toward the Middle East, Africa, and Southeast Asia.

Engineering Export Trends Over the Last 5 Years

India's engineering export performance has shown resilience and consistent growth. In 2018–19, exports stood at USD 81.02 billion, rising modestly to USD 81.8 billion in 2019–20. A dip was observed in 2020–21 due to COVID-19 disruptions, falling to USD 75.9 billion. However, the sector recovered strongly in 2021–22 with exports surging to USD 112.1 billion—the highest to date. In the subsequent years, despite global headwinds, exports remained steady at USD 107 billion in 2022–23 and increased slightly to USD 109.32 billion in 2023–24.

Current Operational Practices in the Industry

Most Indian engineering exporters still operate with conventional workflows:

Manual Documentation: Use of spreadsheets and word processors for creating trade documents.
Email-based Coordination: Communications with logistics, customs, and regulatory bodies via email.
Compliance via Consultants: Many companies rely on third-party consultants for regulatory interpretation.

Paper-Based Recordkeeping: Shipment and compliance data are often archived physically.

Key Bottlenecks and Gaps

Source: World Bank Logistics Performance Index, LinkedIn Export Challenges Survey

Strategic Growth Factors: Why the Sector Holds Immense Potential

Global Supply Chain Diversification: Increasing global preference for Indian engineering products over traditional Chinese supply chains.
Government Support Schemes: PLI schemes, RoDTEP, and SEZ incentives directly boosting exporter profitability.
Technological Advancements: Enhanced R&D capabilities leading to precision-engineered products, particularly in aerospace and electronics.
Growing Export Infrastructure: Development of ports, logistics hubs, and dedicated industrial zones to streamline trade operations.
Rise in High-Value Manufacturing: Accelerated growth in aerospace, defense, renewable energy, and electronic components sectors.

Advancing Compliance and Efficiency: Adopting Liquidmind®.ai's TradeVeda

Real-time Validation of Export Documents: Eliminates errors before causing shipment delays.
Automated Regulatory Updates: Immediate updates to international regulatory changes ensure ongoing compliance.
AI-driven Risk Management: Efficient detection of sanctioned or high-risk trade entities.
Blockchain-enabled Audit Trails: Provides secure, verifiable, and tamper-proof compliance documentation.
Conversational User Interface: Simplifies user interaction, enabling quick resolution of compliance queries and concerns.