India's engineering goods exports reached an all-time high of $122.43 billion in FY 2025–26, surpassing the previous record of $116.75 billion in FY2024–25 and posting a growth of about 5 per cent, industry body EEPC India said on Wednesday.

The body called the achievement a testament to the sector's resilience amid an exceptionally challenging external environment.

The record was achieved against a backdrop of geopolitical tensions, supply chain disruptions stemming from the West Asia conflict, shifting trade policies under the Trump administration, and elevated freight and energy costs, headwinds that the engineering sector navigated through market diversification, new product lines, and strategic use of free trade agreements, it said.

Even in March 2026, when one of the key sea routes was disrupted due to the West Asia conflict, engineering exports recorded a marginal growth of 1.1 per cent, rising to $10.94 billion from $10.82 billion in March 2025.

The ability to maintain positive growth during peak supply chain stress was cited by EEPC India as evidence of the sector's adaptability.

EEPC India Chairman Pankaj Chadha attributed the record performance to a combination of industry initiative and timely policy support.

"The engineering community, while dealing with these issues, also identified new opportunities and went into the market as well as product diversification," he said.

Free trade agreements provided the framework for the sector to pivot to new geographies as traditional trade routes came under pressure.

Looking ahead, EEPC India said it remains cautiously optimistic on the export growth outlook for FY 2026–27.

The West Asia conflict -- which erupted on February 28 -- has caused sustained supply chain disruptions, pushed energy prices sharply higher, and contributed to raw material inflation.

"We expect the geopolitical tensions to ease and conflicts to settle, paving the way for robust engineering exports growth in the current fiscal," Chadha said, while flagging that the inflationary environment and global uncertainty warranted a measured outlook.