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Engineering

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Engineering Industry in India

December, 2012

Brief Introduction

India's engineering industry has proved its mettle to the world, as more and more engineering companies are offering their services to their international clients. Giving the benefits of cost savings and faster learning, Indian engineering sector is enjoying huge investments as many of the multinational national companies (MNCs) are setting up their research and development (R&D) centres in the country. "Global automotive or aerospace companies are increasingly asking Indian companies to co-develop a product instead of working on specifications set by them such as building infotainment systems inside a car or new wing technology for an aircraft," said Suvojoy Sengupta, Managing Director, India, Booz and Co.

Moreover, a recent study by Kauffman Foundation, has found out that about 33.2 per cent of the co-founders of engineering and technology companies incorporated in the US over 2006-12 were Indians. The study - America's New Immigrant Entrepreneurs: Then and Now - was conducted among a random sample of 1, 882 companies of the total 107, 819 engineering and technology companies founded in the last six years in the US.

India is also transforming into a research hub for the global companies. India spends around 0.9 per cent of gross domestic product (GDP) on R&D. Since R&D is the basic constituent of promoting innovation, Indian entrepreneurs as well as the Government are highly focussed to augment the culture of research in the country. About 6, 000 patent applications were filed by Indians in 2010, which formed 0.3 per cent of the total applications filed in the world. Hence, there lies a lot of scope for development and investment in the area.

Exports

The US and Europe together account for over 60 per cent of India's total engineering exports. Engineering exports from India amounted to US$ 36 billion during April-November 2012.

During 2011-12, engineering exports grew 17 per cent to US$ 58.2 billion, as against US$ 49.7 billion in the previous fiscal.

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

Design & Engineering- Key Developments and Investments

The miscellaneous mechanical and engineering industries' sector-wise foreign direct investments (FDI) inflows from April 2000 to October 2012 was calculated at US$ 2, 282.02 million, as per the Department of Industrial Policy and Promotion (DIPP).

  • India's largest utility vehicle and tractor maker Mahindra & Mahindra (M&M) intends to tap highly skilled automotive talent pool of the US by commencing a technical centre in Troy, Michigan. The region's design and consulting service resources are expected to support the company's automotive and tractor engineering requirement in India.

    Mahindra & Mahindra already has a significant presence in North America with businesses ranging from information technology (IT) to tractors to aerospace
  • Havells India Limited, a US$ 1.3 billion leading Fast Moving Electrical Goods (FMEG) company and power distribution equipment manufacturer has launched India's first large scale lighting fixture plant at Neemrana, Rajasthan. The company infused a capital of Rs 100 crore (US$ 18.2 million) to build this state-of-the-art plant as a part of its strategy to strengthen its position in the fast growing and rapidly emerging lighting fixtures market in India. The plant, currently employing around 250 people, will cater to both, consumer and industrial lighting applications. It will also help to effectively control production efficiency and quality, widen customer responsiveness and reduce delivery response time
  • Shriram EPC Ltd has won a US$ 230 million contract for setting up a storm water and sewer system in Basra, Iraq. The order would be executed through a joint venture (JV) with the Mokul Group, a global service provider present across diverse industries. The scope of the order involves setting up a basic sanitary system in Basra, including engineering, supply, installation of pipelines, pumping stations and road works