Engineering and Capital Goods
India became the second largest casting producer globally in 2017.

Indian Engineering Industry Analysis

Latest update: October, 2018

Growth

 

Last Updated: October, 2018

The Indian engineering sector is divided into two major segments - heavy engineering and light engineering. The capital turnover in India is estimated at US$ 70 billion in 2017 and is expected to grow to US$ 115.17 billion by 2025. Likewise, electrical equipment production is expected to reach US$ 100 billion by FY 2021-22 from US$ 27.3 billion in 2017-18. 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. Engineering exports from India grew 16.81 per cent to US$ 76,204.38 million in FY18 from US$ 65,239.19 million in FY17. Engineering exports during Apr-Aug 2018 stood at US$ 33.56 billion.

As of 2017, India was the world’s eighth largest consumer of machine tools globally. Production of machine tools 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 78,109 and 66,613 units of construction equipment in 2017 and 2016 respectively. Construction equipment sales are expected to grow to 90,115 in 2018 and further increase to 100,000 units by 2022. Construction equipment market is projected to reach US$ 5 billion by FY20 from around US$ 4.3 billion in FY18.

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. Miscellaneous mechanical and engineering industries have received FDI inflows worth US$ 3,454.46 million during April 2000 to June 2018.

Indian Engineering and Capital Goods Industry Report (October, 2018)
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Indian Engineering and Capital Goods Industry Report (September, 2018)
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