Indian Engineering Industry Analysis

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

*The electrical equipment market share in India is expected to increase from US$ 52.98 billion in 2022 to US$ 125 billion by 2027, implying a robust CAGR of 11.68%.

*Market size for the Indian Construction Equipment Market stood at US$ 7.2 billion in FY23 and is forecasted to grow at a CAGR of 15% for next five years, as per the estimates of CII.

Robust Demand Icon

Attractive
Opportunities

*In Interim Budget 2024-25, Government has committed an outlay of Rs. 11.11 lakh crore (US$ 133.6 billion) during 2024-25 towards infrastructure capital expenditure compared to Rs. 10 lakh crore (US$ 120 billion) (BE) during 2023–24.

*Ministry of Road Transport & Highways aims for 13,814 km of national highway construction in FY 2024 and a network to two lakh km by 2025.

*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.

Attractive Opportunities

Policy
support

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

*Ministry of Heavy Industries has notified the Scheme on Enhancement of Competitiveness in the Indian Capital Goods Sector- Phase-II for providing assistance to Common Technology Development and Services Infrastructure. The scheme has a financial outlay of Rs. 1207 crores with Budgetary support of Rs.975 crore and Industry Contribution of Rs.232 crore

*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.

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.

*The Government’s ‘Vision Plan 2030’ proposed an action plan to become a manufacturing and export hub for construction equipment and propel the development of world-class infrastructure in the country.

Higher Investments
Last updated: May, 2024

Engineering Clusters

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

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