Engineering Industry in India

The engineering sector is the largest of the industrial sectors in India, as it accounts for 27% of the total factories in the industrial sector and represents 63% of the overall foreign collaborations.

Advantage India

Robust
Demand

* Demand in the engineering industry segment is driven by investments and capacity creation in core sectors like power, infrastructure developments, mining, oil and other sectors like the general manufacturing sector, automotive and process industries, and consumer goods industry.

Robust Demand Icon

Attractive
Opportunities

* In Budget 2023-24, Government has committed an outlay of Rs. 10 lakh crore (US$ 120 billion) during 2023-24 towards infrastructure capital expenditure compared to Rs. 7.5 lakh crore (US$ 90 billion) (BE) during 2022–23.

* An Urban Infrastructure Development Fund (UIDF) will be managed by National Housing Bank, which will enable creation of infrastructure in Tier 2 and 3 cities by supporting viability gap funding, enabling creation of more bankable projects, enhancing access to external funding, among others.

* In June 2022: Ministry of Heavy Industries (MHI) and Ministry of Skill Development and Entrepreneurship (MSDE) sign MoU to facilitate training in engineering trades to boost capital goods sector.

Attractive Opportunities

Policy
support

* De-licensed engineering sector; 100% FDI permitted.

* An amount of Rs. 54.22 crore (US$ 6.5 million) utilized under the Scheme on ‘Enhancement of Competitiveness in Indian Capital Goods Sector in the financial year 2020-21.

* Indian Electrical Equipment Industry Mission Plan (2012-22), aims to make India as a preferred destination for production of electrical equipment to achieve an output of US$ 100 billion by balancing the trade deficit in the sector.

* In October 2022, NSIC Signs MoU with Phillips Machine Tools India Pvt. Ltd. for Skill Development Training in Additive Technologies which is the future of manufacturing.

* In May 2022, MHI signs an MoU with National Research Development Corporation to facilitate various activities for smooth implementation of the Scheme for Enhancement of Competitiveness in the Indian Capital Goods Sector.

Policy Support

Higher
Investments

* To enhance opportunities for private investment in infrastructure - Infrastructure Finance Secretariat is being established who will assist all stakeholders for more private investment in infrastructure, including railways, roads, urban infrastructure, and power.

Higher Investments
Last updated: Feb, 2024

Engineering Clusters

  • Maharashtra
  • Tamil Nadu
  • Andhra Pradesh
  • Telangana
  • Gujarat
  • Karnataka
Engineering Clusters in India

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Engineering sector accounts for 27% of the total factories in the industrial sectors and represents 63% of the overall foreign collaborations.

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