Engineering companies maintain a positive outlook for order activity from West Asia, despite the recent escalation of tensions. Data available for engineering exports indicate an annual rise of almost 50 per cent in September, supporting the optimism.

       In the current quarter starting October 1, Larsen & Toubro (L&T), KEC International, and Gensol Engineering are among the companies that have announced new order wins from West Asia.

       For India’s largest engineering conglomerate, L&T, 40 per cent of ongoing projects are now based in West Asia. The company’s top executives, both in calls with analysts and the media, said they expect the capital expenditure momentum in West Asia to remain healthy.

       “Despite all of this chaos, it is encouraging to note that the countries in the Middle East, led largely by Saudi Arabia, are continuing to focus on investments in oil and gas, infrastructure, industrialisation, and energy transition projects,” L&T’s management told analysts.

       For the April-September period, West Asia and North Africa (WANA) contributed 16 per cent to India’s engineering exports, registering the highest growth of 24.1 per cent from a year ago, according to Engineering Exports Promotion Council (EEPC) data.

       EEPC added, “Engineering exports to the UAE surged 49.9 per cent from a year ago to $672.1 million in September. In the first six months of the financial year, shipments to the UAE grew 44.8 per cent year-on-year to $3.90 billion.”

       Arun Kumar Garodia, chairman of EEPC, noted that exports for October also look positive. “Exports are growing continually each month. The Middle East is in crisis, yet business has grown with the UAE and Saudi Arabia,” he said.

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       KEC International recently announced a Rs 1,142 crore order win, including a 380 kV transmission line project in Saudi Arabia. Vimal Kejriwal, managing director and chief executive officer of KEC International, said the company’s international order book has seen significant growth in recent months, particularly in the Middle East, driven by a series of successful order wins in Saudi Arabia and the UAE.

       Others, such as Kalpataru Projects International, noted profitability concerns but acknowledged that opportunities from West Asia are on the rise. “Although we are not so bullish on the Middle East in the transmission and distribution (T&D) business due to profitability constraints, we are seeing good opportunities emerging there too,” company executives informed analysts on a recent call.

       In an interview with Business Standard in October, Marc Gilbert, managing director and senior partner at BCG Canada and global lead at the BCG Center for Geopolitics, noted, “In the macro-economic context, the conflict in the Middle East has had very minimal impact on global trade, except when the Houthis were attacking ships. This crisis has not been dislocating trade like the Russia-Ukraine conflict.”

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