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Indian Engineering Industry Analysis

September, 2017

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 FY 2016-17. Likewise, Electrical equipment market size is forecast to reach US$ 100 billion by FY 2021-22 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.

During January - May 2016, the industry recorded sales of 21,869 units, which represents a growth of 47.6 per cent over the same period of the previous year.

Companies engaged in the engineering sector are virtually on a roll. Capacity creation in sectors like infrastructure, power, mining, oil & gas, refinery, steel, automotive, 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.

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