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India's engineering goods including steel and machinery exports rose 10.7% year-on-year in March to $11.28 billion, growing in double digits for the second straight month, despite ongoing supply issues caused by disruption to shipping through the Red Sea, a trade body said.

Engineering goods, which account for one-fourth of merchandise exports, rose 2.13% in the 2023/24 financial year, to $109.3 billion from a year earlier, Engineering Export Promotion Council (EEPC), a body affiliated with the Commerce Ministry, said in a statement on Thursday.

Exports have been dented by a slowdown in global demand, the ongoing Russia-Ukraine war and the Red Sea shipping crisis brought on by conflict in the Middle East, exporters said.

Engineering exports to the U.S. declined 5.7% year-on-year to $17.62 billion in 2023/24.

India's merchandise exports fell in the 2023/24 financial year - the first decline since 2020/21 - to $437 billion from $451 billion in the previous year.

Automobile exports declined 5.5% in 2023/24 financial year, hit by a shortage of forex reserves in some markets.

"However, a revival of exports was noted in key markets including North America, EU and North East Asia," said Arun Kumar Garodia, chairman of EEPC.

North America and the European Union (EU) remained India's top destinations for engineering exports with a share of 20% and 19%.

Engineering exports to Russia grew sharply in the fiscal year to $1.35 billion from $733.6 million in the preceding year.

The exporters however remain worried about prospects in the coming months.

"The protectionist environmental policies of the EU and slow economic revival in China will continue to create uncertainties for the exporters," Garodia said.

Engineering exports to China, a key market, remained almost flat at $2.65 billion in 2023/24, compared to $2.63 billion in the previous financial year.