The engineering sector is one of the major contributors to the country's total merchandise shipments.

Engineering Industry in India

Latest update: March, 2014


Over FY08–13, Indian engineering exports registered a compound annual growth rate (CAGR) of 12.6 per cent.


Market Share

Cables contribute 27.3 per cent to the electrical equipment market.

Market Share


Cumulative foreign direct investment (FDI) inflows increased to US$ 17.3 billion in FY13 from US$ 8.9 billion in FY10.


Export Segment

Transport equipment is the leading contributor to engineering exports. The segment accounted for 32.5 per cent of the total engineering exports during FY13.

Export Segment

Updated: March, 2014



The engineering sector is the largest of the industrial sectors in India and can be broadly categorised into two parts, namely, heavy engineering and light engineering. India’s engineering industry accounts for 27 per cent of the total factories in the industrial sector and represents 63 per cent of the overall foreign collaborations. It has emerged as the largest contributor to the country’s total merchandise exports.

Capacity creation in sectors such as infrastructure, power, mining, oil and gas, refinery, steel, automotive, and consumer durables are driving demand in the engineering sector. The sector has a comparative advantage in terms of manufacturing costs, market knowledge, technology and creativity.

Continued growth of manufacturing sector and favourable regulatory policies would further propel the sector’s growth. The engineering industry has been de-licensed and enjoys 100 per cent foreign direct investment (FDI). Further, the National Policy on Electronics is formulated by the Government of India to boost India's electronics systems and design the manufacturing industry and improve its share in the global market.


The engineering sector is among the top two contributors to the total Indian export basket with total shipments of US$ 56.7 billion in 2012-13. Engineering exports from India include transport equipments, capital goods, other machinery/ equipment and light engineering products like castings, forgings and fasteners. During February 2014, the sector’s exports stood at US$ 5.02 billion.

The employment oriented engineering sector, which encompasses a large number of micro, small and medium enterprises (MSMEs), would be contributing something like US$ 65 billion to the overall export shipments of US$ 326 billion, as targeted by the government, as per Mr Anupam Shah, Chairman, EEPC India.

Engineering exports to India’s Free Trade Agreement (FTA) partners such as Japan, South Korea, Sri Lanka and the Association of Southeast Asian Nations (ASEAN) bloc have witnessed robust growth. Shipments to Japan grew 17 per cent during April-November, 2013-14 to US$ 568 million as compared to the same period last year. Exports to South Korea increased by over 13 per cent to US$ 739 million during the period.

The United States (US) and Europe account for over 60 per cent of India's total engineering exports. Swiss giant ABB, US powerhouse Cummins, Denmark based Danfoss and Toshiba of Japan are among 50 international corporates throwing big engineering outsourcing avenue to Indian businesses capable of delivering world class technology products.

Key Developments and Investments

The miscellaneous mechanical and engineering industries’ sector-wise FDI inflows during April 2000-December 2013 were calculated at US$ 2,588.09 million, according to the Department of Industrial Policy and Promotion (DIPP). Some of the major investments and developments in the sector include the following:

  • Engineers India Ltd (EIL) has won a US$ 139 million contract from Nigerian company Dangote Group for providing project management consultancy (PMC) and engineering, procurement and construction management (EPCM) services for a refinery and polypropylene plant.
  • Moog Inc, which makes high precision motion control equipment for aerospace, defence and industrial applications, plans to expand its servo motor research and development (R&D) and manufacturing in India.
  • Elecon Engineering Company Ltd has won an order worth Rs 246.78 crore (US$ 40.47 million) by National Thermal Power Corporation Ltd (NTPC) for supply of coal handling plant package of Gadarwara Super Thermal Power Projects, Stage-I.
  • L&T Construction has bagged an engineering, procurement and construction order from Saudi Aramco for the construction of 55 kilometre (km) of 230 kilovolt (kV) double circuit overhead transmission line and underground cabling.
  • Synergy Property Development Services Pvt Ltd has bagged a design and project management contract from Dubai-based Signature Group to manage a mixed-use development project worth US$ 35 million in Maputo, Mozambique.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


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