Engineering exports from India increased 14.7 per cent to US$ 70.6 billion in FY15’.

Indian Engineering Industry Analysis

Latest update: January, 2016

Inflow of foreign investments

• Cumulative FDI inflows increased to US$ 26.3 billion in FY16*   from US$ 8.9 billion in FY10.

• The government’s increasing focus on attracting foreign   investors in manufacturing and infrastructure is likely to boost   FDI in the sector.

• FDI inflows includes Automobile industry, Electrical equipment,   Miscellaneous mechanical and engineering industry, Industrial   machinery, Machine tools, Agriculture machinery, Earth-moving   machinery and Industrial instrument

Key categories of engineering exports

• Transport equipment (which includes Auto & auto component   including Aircraft and ship boats) is the leading contributor to   engineering exports accountingfor 34.5 per cent of the total   engineering exports in FY 15.

• Iron & Steel and products made of Iron & Steel have accounted   around 22.9 per cent market share while industrial machinery   including electrical machinery accounted 21.9 per cent of the total   engineering exports in FY15.

• Others commodities includes Medical and Scientific instruments,   Hand tools & Cutting tools, Bicycle parts, Office equipments,   Prime Mica & Mica Products etc. accounted 8.7 per cent of the   total engineering exports in FY15.


Last Updated: January, 2016

The Indian engineering sector is divided into two major segments - heavy engineering and light engineering. The capital goods and engineering turnover in India is expected to reach US$ 125.4 billion by FY17. Likewise, Electrical equipment market size is forecast to reach US$ 100 billion by FY22 

Comparative advantage vis-à-vis peers in terms of manufacturing costs, market knowledge, technology and creativity has been a driving force for engineering exports from India. Engineering exports from India stood at US$ 70.6 billion in FY15, registering a Compound Annual Growth Rate (CAGR) of 11.1 per cent over FY08-15.

Companies engaged in the engineering sector are virtually on a roll. Capacity creation in sectors like infrastructure, power, mining, oil & gas, refinery, steel, automotives, and consumer durables has been driving demand in the engineering sector. Separately, the approval of significant number of special economic zones (SEZs) across the country and the development of the Delhi Mumbai Industrial Corridor (DMIC) across seven states is expected to further bolster the engineering sector.

With 100 per cent Foreign Direct Investment (FDI) allowed through the automatic route, and initiatives like ‘Make in India’, major international players have entered the Indian engineering sector due to significant growth opportunities available. Cumulative FDI in the sector totaled US$ 26.6 billion over April 2000–May 2015.

Sectoral Presentation (January, 2016)

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