BRAND INDIA ENGINEERING: CONSTRUCTION SECTOR IN INDIA

Construction sector plays a pivotal role in the economic growth of a nation, especially in an emerging one like India. The market size of Indian construction industry is around Rs 248,000 crore (US$ 37.6 billion) and it currently employs a workforce of nearly 32 million, the second largest sector after agriculture.

Linkage with the development of other sectors: Construction sector generates substantial employment and provides growth impetus to several sub-sectors of manufacturing like cement, bitumen, iron and steel, chemicals, bricks, paints, tiles etc. whose combined value is Rs 192,000 crore (US$ 29 billion) annually. The construction equipment market is valued at Rs 105,000 crore (US$ 16 billion). It is roughly estimated that 40–45 per cent of steel; 85 per cent of paint; 65–70 per cent of glass and significant portions of the output from automotive, mining and excavation equipment industries are used in the construction industry.

Growth of construction industry and its share in total output: Construction sector in India is the second largest contributor to the GDP. The contribution of this sector to GDP was averaged at around 7.5 per cent between 2009-10 and 2013-14, but with the shift of National Income Accounting to Gross value Added (GVA) based measures, its share increased to an average of 8.6 per cent during the last four fiscals ended 2014-15.

Construction Equipment – Positive Outlook

• During 2015, Construction industry grew by 2-3% and hit volumes of 48,000 units. By 2018, the industry is expected to hit volumes of 74,000 units.
• Construction Industry is an important sector with its contribution of 10% to India's GDP.
• In India, the sector accounts for second highest inflow of FDI after the services sector and employs more than 35 Million people.
• 100 Smart Cities and 500 AMRUT Cities will invite investment of 2 Trillion Rupees in the next five years.
• Apart from the Smart Cities project, the Government's 'Housing for All by 2022' is also a major game changer for the industry.
• Construction sector is climbing up the growth ladder, with 100% FDI and an expected investment of US$ 650 billion in the coming 20 years.
• The major export destination for India's construction sector include USA, UAE, Saudi Arabia and UK.

Reasons to Invest in Indian Construction Industry

• In the 12th Plan, it is estimated that Indian infrastructure industry requires an investment of US$ 1 trillion during 2012-17 in order to take economic growth to double digit on a sustained basis.
• Around 40 per cent of these investments are projected to come from private players. Now, 45 per cent of this infrastructure investment will be channeled into construction activity and 20 per cent set to modernise the construction industry.
• The Indian government has undertaken a number of measures to ease access to funding for the sector.
• The construction industry in India has seen sustained demand from the industrial and real estate sector.
• An estimated US$ 650 billion will be required for urban infrastructure over the next 20 years.
• 100 per cent FDI through the automatic route is permitted in townships, housing, built-up infrastructure and construction-development projects.

Construction is the second most attractive sector of India after services for foreign direct investors with 10 per cent share in cumulative FDI during the last 15 fiscal years ended March 2015.

Opportunities for Investments

• Construction development in residential, retail, commercial and hospitality sectors.
• Technologies and solutions for smart sustainable cities and integrated townships.
• Technologies for the promotion of low cost and affordable housing.
• Green building solutions.
• Sustainable and environmentally friendly building materials.
• Training and skill development of construction sector workers.
• Smart cities.
• Urban water supply, urban sewerage and sewage treatment.

The Way Forward

Forecasts for the market size of construction industry for the 12th Plan period indicate that the aggregate output of the industry during the period 2012–13 to 2016–17 is likely to be Rs 52.31 lakh crore (US$ 793 billion) increasing from Rs 7.67 lakh crore (US$ 116 billion) in 2012–13 to Rs 13.59 lakh crore (US$ 206 billion) in 2016–17. As the growth of construction industry is very much linked to the growth of infrastructure and building industry, emphasis of the govt. on both in the 12th plan is expected to drive the growth of the construction in the days ahead.

The 'Make in India' initiative by the Prime Minister Mr Narendra Modi aims at increasing production and export from Indian manufacturing sector by inviting more foreign investors to produce from India. Construction is selected as one of the 25 sectors included in the initiative and therefore, the growth of this sector is inevitable in the years to come.

INDIAN PAVILION LIST

Brand India Engineering at The Big 5, Dubai

Brand India Engineering will make its presence felt at The Big 5, Dubai being held from November 21-24, 2016 at the Dubai World Trade Centre. Over 50 Indian companies are participating this year at The Big 5 across sectors like pumps, construction, wires, cables etc.

Brand India Engineering campaign, launched by Ministry of Commerce & Industry, Government of India, is a dedicated brand campaign that aims at improving the perception of Indian engineering products across markets. India Brand Equity Foundation (IBEF), a Trust established by the Department of Commerce and EEPC India, an apex national body representing engineering industry, is steering the campaign in coordination with national associations & industry stakeholders in the Pumps & Valves sector.