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Engineering Industry in India

March, 2013

Brief Introduction

The Indian engineering industry accounts for 27 per cent of the total factories in industrial sector and represents 63 per cent of the overall foreign collaborations. The country is increasingly attaining global recognition especially for its low-cost, high-tech frugal innovation technology, according to a World Bank study named ‘Unleashing India’s Innovations’. International companies are outsourcing industrial engineering design tasks to India in sectors like semiconductors, automotive hybrid technologies, next-gen routers in telecom, power generation equipments, aerospace, avionics and consumer electronics, besides setting up research and development (R&D) centres in India.

A recent economic survey has noted that India has better scientific research institutions and the industry contribution towards R&D has been increasing over the last few years. The country has been ranked much ahead of its peers when it came to market knowledge, technology and creativity.

India’s focus on innovation and its unique strengths in knowledge industries have made it one of the largest R&D centres for many of the top notch US companies including General Electric, Honeywell, and IBM, stated Nirupama Rao, India's ambassador to the US. She also said that India has become a key global hub of new world trade routes and trading arrangements and has contributed significantly in the establishment of new supply chain networks, thereby emerging as one of the fastest growing markets in the world.


Engineering exports during April-December 2012-13 stood at US$ 45.33 billion.

Mr Anand Sharma, the Commerce and Industries Minister, has recently stated that India is identifying newer markets along with strengthening its base in key markets of the US and Europe to meet the set target of US$ 125 billion by 2013-14 for engineering exports.

Design & Engineering- Key Developments and Investments

The miscellaneous mechanical and engineering industries’ sector-wise foreign direct investments (FDI) inflows from April 2000 to January 2013 was calculated at US$ 2, 305.40 million, as per the Department of Industrial Policy and Promotion (DIPP).

  • Geometric’s German subsidiary Geometric Europe GmbH has fully acquired electronics engineering company 3Cap Technologies GmbH (3Cap). The take-over will not only help the company strengthen its presence in Europe, but will also fill major gap in the solutions it offers to its clients
  • Industrial and automotive batteries manufacturer Amara Raja Batteries, that provides batteries to Indian railways, power, oil and gas sectors, will infuse Rs 440 crore (US$ 81.07 million) to enhance production capacities of its VRLA and four-wheeler batteries over 2013-15.
  • State owned Heavy Engineering Corporation (HEC) has planned to invest Rs 750 crore (US$ 138.21 million) in new technologies to fulfil its aim to increase the share of manufacturing in its overall revenue base. The capital infusion would be done over 2013-17 in order to adopt latest technologies and improve capacity to a significant extent
  • Nasdaq-listed Adtran Inc’s fully-owned subsidiary Adtran Networks India Private Ltd has opened a high-technology engineering facility in Hyderabad. The networking solutions provider has been in Hyderabad for over six years and has opened this new centre to focus on telecom software and hardware design. The new centre is expected to help the company increase its capabilities in the region besides advancing collaboration and synergies across its global research and development locations
  • Mitsubishi Electric India (MEI) has commenced assembly of inverters for industrial and building applications at Pune. The facility will initially acknowledge the Indian markets and subsequently begin exports to South-East Asian markets. The company has also set up an India Development Centre to support development of products such as programmable logic controllers, human machine interfaces and servo drivers that will be manufactured at one of the three locations globally
  • Tata Technologies, a provider of engineering services and manufacturing enterprise IT, has set up an innovation centre in the US that will offer design and consulting services for automotive companies globally. The centre will be the North American home to the Tata Technologies Vehicle Programmes Development group.
  • The California-based Cyber security firm FireEye has announced that it will invest up to US$ 50 million in R&D over Internet security products in the next 4-5 years. The company has recently launched its R&D centre in Bangalore which will develop and test new products. The new centre is said to be an important pedestal in the company’s global expansion plan and is expected to play a key role in innovation in security products.