Trade Analytics
Engineering and Capital Goods
Engineering exports grew 6.32 per cent year-on-year to US$ 81.02 billion in FY19.

Indian Engineering Industry Analysis

Latest update: September, 2019

Growth

 

Last Updated: September, 2019

The Indian engineering sector is divided into two major segments - heavy engineering and light engineering. The turnover of capital goods industry in India is estimated at US$ 70 billion in 2017 and is expected to grow to Rs 8,04,923.13 crore (US$ 115.17 billion) by 2025. Likewise, electrical equipment production is expected to reach Rs 6,98,900 crore (US$ 100 billion) by FY 2021-22 from Rs 39.06 crore (US$ 5.58 million) in 2017-18. The electrical equipment industry grew 13.7 per cent year-on-year during April 2018-January 2019. Overall growth index for electrical equipment industry for 2018-19 stood at 11.2 per cent.

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. In FY19, India’s engineering export have crossed Rs 5,80,087 crore (US$ 83 billion). Engineering exports grew 6.32 per cent year-on-year to Rs 5,66,248.78 crore (US$ 81.02 billion) in FY19. In FY20 (April-July 2019), India’s engineering export have crossed US$ 26.04 billion.

As per Mr Piyush Goyal, Minister for Commerce and Industry & Railways, the government will make all efforts to ensure that the exports of engineering goods reach US$ 200 billion by 2030.

As of 2017, India was the world’s eighth largest consumer and 12th in production of machine tools globally. Production of machine tools in the country grew 25.7 per cent y-o-y to Rs 7,293 crore (US$ 1.13 billion) in 2017-18, while exports reached Rs 355 crore (US$ 55.08 million). Production is forecasted to increase to Rs 9,000 crore (US$ 1.40 billion) in 2018-19. Construction equipment industry recorded sales of 98,204 and 78,109 units of construction equipment in 2018 and 2017, respectively. Construction equipment sales are expected to grow further to 110,815 units by 2022. Construction equipment market is projected to reach Rs 34,945 crore (US$ 5 billion) by FY20 from around Rs 30,052.7 crore (US$ 4.3 billion) in FY18.

Government has also announced to invest Rs 10,000,000 crore (US$ 1.5 trillion) in infrastructure over the next five years.

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.

Government has proposed granting of loans up to Rs 1 crore (US$ 0.15 million) for MSMEs within 59 minutes through a committed online portal. Under the Interest Subvention Scheme for MSMEs, Rs 350 crore (US$ 52.50 million) has been allocated for FY 2019-20.

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. Miscellaneous mechanical and engineering industries have received FDI inflows worth Rs 25,020.62 crore (US$ 3.58 billion) during April 2000 to March 2019.

Indian Engineering and Capital Goods Industry Report (September, 2019)
Download PDF Download PDF  (Size: 1.3 MB )

Click to access the Engineering and Capital Goods Industry Archived Report

Posters

Brand India Pharma

BUILDING THE FUTURE

India's construction equipment market was estimated at US$ 3.47 billion in 2013 ans is expected to reach US$ 7.7 billion by 2016 growing at a CAGR of ...

+ More >

Brand India Pharma

IBEF Publications

IBEF Publication

Agri Export Policy - Towards smoother trade, wider global presence

English

+ More Publications >

IBEF Publication

IBEF Blog - INDIA ADDA – PERSPECTIVES ON INDIA More

author_logo-ibef1.jpg Indian Tourism Industry: An Insight
IBEF, Knowledge Centre

During the celebration of 73rd Independence Day, Prime Minister Mr Narendra Modi addressed the nation from the Red Fort and underlined that India ‘has mu...

author_alok_kirloskar1.jpg From smart water pumps to drones: Technology is changing Indian farms!
Alok Kirloskar, Executive Director, Kirloskar Brothers Limited

Disruptive technologies and innovations in application engineering are fast changing farming practices in India. From preparing the land to sowing, to reaping and mentori...

author_logo-ibef1.jpg Mobile Phone Manufacturing in India: Towards A Brighter Future!
IBEF, Knowledge Centre

India is the world’s second largest mobile phone manufacturer after China. And with the current pace of growth, India is not far from becoming the leading handset m...

author_logo-ibef1.jpg Solar energy generation in India: Lighting lives!
IBEF, Knowledge Centre

The generation of power from solely renewable sources like solar energy is a prime focus of India’s energy planning. Started in the early 1970s, the process of crea...

author_logo-ibef1.jpg Digital payment industry in India
IBEF, Knowledge Centre

From being primarily a cash-obsessed economy, India’s digital payment story is new but exciting. Driven by progressive regulatory policies and increased use of mobi...

author_logo-ibef1.jpg The Indian Hotel Industry, Sunshine Ahead
IBEF, Knowledge Centre

Ever expanding domestic tourism, increasing foreign tourist arrivals, forex earnings growth, high airline passenger numbers and muted supply growth has put the Indian hot...

ideas More

Ideas

Zomato: Top Of The Food Chain
Zomato, an Indian start-up is in the business of online food ordering. It initially launched Foodiebay.com in Gurugram in 2008, a website that scanned menus and provided ratings and recommendations on....

JOIN IBEF.org

Join IBEF.org now. Enjoy FREE subscriptions downloads, updates and more.

Error

Already a member?
Login / Retrieve Password