New Delhi: Troubles in Europe and the US have started hitting Indian exports, with the engineering sector reporting about 14 percent year-on-year decline in its shipments to USD 7.1 billion in September.

Going by the data compiled by the Engineering Export Promotion Council (EEPC), exports stood at USD 8.3 billion in the same period last fiscal. These figures are provisional, an EEPC official said.

With USD 60 billion worth of consignments, engineering goods were by far the largest contributor to the total Indian exports of USD 245.9 billion in 2010-11.

The country's overall exports have shown a sterling performance, growing by 52 percent to USD 160 billion for the April-September period despite slowdown in the US and erosion of business confidence in the debt-ridden Europe.

The decline in the engineering exports has started since September, after several months of huge growth. These shipments for the April-August period expanded by 125 percent, aggregating to USD 40 billion in the first five months of the current fiscal.

"The demand is falling due to economic slowdown in the western markets," an EEPC official said.

The situation is not expected to improve in the coming months, President of the Federation of Indian Export Organisations(FIEO) Ramu S Deora said. "This trend is likely to continue in the third and fourth quarter due to Euro zone problems," he said.

The US and European markets together account for over 40 percent of the country's engineering exports.

Finance Minister Pranab Mukherjee has expressed concern over the impact of global uncertainty on the Indian economy.

"When the world sneezes, India runs risk of catching a cold...Not surprisingly, the economic crisis in Europe and the slowdown in the US are impacting us adversely," he said on Saturday at the meeting of the National Development Council.

Engineering exports include transport equipment, capital goods, other machinery/equipment and light engineering products like castings, forgings and fasteners.

(Agencies)