Indian engineering to get a Canadian lift

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Govt and industry put together an event to push engineering exports to the other North American giant.

Spooked by the ongoing slump in America and the continuing fiscal crises in euro zone countries, the Indian engineering sector is discovering Canada. The country also happens to be, after Friday, the only one in the western hemisphere with a triple-A credit rating from Standard & Poor’s.

Officials of EEPC India, formerly called the Engineering Export Promotion Council, are currently in Canada, preparing for a big push this year of Indian engineering goods and services to this country’s market.

From October 17 to 20, Toronto will host The India Show, an initiative by the commerce ministry to promote Brand India globally. The event will be the Indian engineering industry’s first expo in Canada. It will be part of the Canadian Manufacturing Technology Show, where India is this year’s ‘Strategic International Partner’. CMTS, billed as Canada’s “ultimate manufacturing event”, is held once every two years.

About 120 Indian engineering companies will participate. While major groups like Tatas, Reliance and Essar are expected, the effort will be to help EEPC’s small and medium enterprise members to reach out to potential partners and buyers.

A recent survey by the organisers of CMTS found nearly 60 per cent of Canadian manufacturing companies planned to increase their spending on machinery and equipment this year, while about 30 per cent expect to maintain spending at last year’s level.

At under $5 billion a year, annual trade between India and Canada is negligible compared to India’s trade with other partners such as America or China, worth $50-60 billion, respectively. But India and Canada have set a target of tripling bilateral trade by 2015, and India is on Canada’s list of 13 priority markets.

That’s where this sector comes in, said Aman Chadha, chairman of EEPC India, to Business Standard here. Engineering makes up a quarter of all exports from India, earning $60 billion of India’s total exports of $240 billion last year. But even after a 30 per cent growth, India’s engineering exports to Canada last year only amounted to $367 million.

This, Chadha pointed out, accounted for a mere quarter per cent of Canada’s engineering imports, and left huge room for growth. He said Indian exporters had failed to focus on Canada so far, with 40 per cent of their goods directed to the US and the European Union.

Those exports are expected to take a big hit in the near future. Chadha says exports to the US have been hit drastically of late and exporters expect a further tapering in orders as America’s focus shifts from stimulus efforts to spending cuts. The steady fall of the US dollar against the Indian rupee has also added to exporters’ woes. On the other hand, the strength of the Canadian dollar – it is now stronger than the US dollar – is attractive to Indian exporters. However, the challenges to boosting trade go beyond introducing Indian companies to Canadian buyers. While the distance between India and Canada is comparable to that between India and the US, there is less freight traffic to Canada, making shipments more difficult and costlier.

The India Show will showcase the country’s traditional strengths in the steel, automobile, auto components and electrical goods sectors. EEPC officials say they also want to promote India as a source for engineering services, research and development and engineering process outsourcing. Says Chadha, “If you want one million buckets, don’t come to India, go to China. But come to us for high-quality, low-volume products.” This will be the second India Show organised by EEPC India, after the first such event held in Turkey this January. There will also be a cultural element to the show in Toronto, with Indian arts and cuisine on display. Also on show will be a Tata Nano, which according to Chadha, is likely to be a big draw.

EEPC says previous efforts to open new markets have paid off, with engineering exports to Latin America and Africa doubling in the past couple of years. Chadha predicts the effect of The India Show in Toronto will be visible in two years.

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