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Engineering: Nov 2012

November, 2012

Capacity creation in sectors like infrastructure, power, mining, oil & gas, refinery, steel, automotives, and consumer durables is driving demand growth in the engineering sector.

Machine tools industry is set to benefit from growing demand for capital goods. India has a comparative advantage in manufacturing costs due to lower design, research and labour costs, and economies of scale.

The Indian boiler industry has the capability to manufacture boilers with super critical parameters up to 1000 megawatt (MW) unit size. Market size of the industry increased to US$ 5.1 billion in FY12.

Indian engineering exports stood at US$ 65.3 billion in FY11. India's engineering exports increased at a compound annual growth rate (CAGR) of 23.7 per cent during FY07-11.

Transport equipment is the leading contributor to engineering exports; the segment accounted for 26.8 per cent of India's engineering exports in FY11. Machinery and instruments is the other major contributor with a share of 17.2 per cent.

With 100 per cent FDI through the automatic route being permitted, major international players such as Cummins, ABB and Alfa Laval have entered the Indian engineering sector.

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