The growth in the engineering sector was recorded at 5.3 per cent between 2007–08 and 2008–09, measured on the basis of Index of Industrial Production (IIP), which registered an overall growth of 2.8 per cent during this period. India is the world‘s second-largest manufacturer of two wheelers and the fifth-largest manufacturer of commercial vehicles.
The engineering sector depends on other sectors such as power, infrastructure and construction for end consumption. The growth of the engineering sector is directly contingent on the growth of these sectors. India offers the advantage of low manufacturing costs due to economies of scale, low design, research and labour costs.
Cumulative FDI inflow from November 2000 to September 2010 for the engineering sector was recorded at US$ 13.3billion, which is 11.1 per cent of the total FDI inflow in the country during the same period. The GoI has permitted 100 per cent foreign equity investments.
Indian engineering exports increased at a compound annual growth rate (CAGR) of 13.7 per cent over the past four years to reach US$ 34 billion in 2009–2010.Sectoral Presentation (November 2010)
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