Engineering and Capital Goods
Turnover of Indian capital goods industry reached US$ 70 billion in 2017.

Indian Engineering Industry Analysis

Latest update: July, 2018

  • 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.
  • During FY08–FY18, engineering exports from India registered growth at a CAGR of 8.50 per cent
  • Engineering exports include transport equipment, capital goods, other machinery/equipment and light engineering products such as castings, forgings and fasteners.
  • Electrical equipment industry’s production for FY17 is estimated at US$ 23.64 billion
Growth

Notes: FY- Fiscal Year
Source: Reserve Bank of India, Engineering Export Promotion Council, Engineering Export monitoring report, Ministry of Commerce and Industry Estimates

  • Cumulative FDI inflows since April 2000 into the miscellaneous mechanical and engineering sector increased to US$ 3.39 billion in FY18* from US$ 1.12 billion in FY11.
  • The government's increasing focus on attracting foreign investors in manufacturing and infrastructure is likely to boost FDI in the sector
  • During FY 2010-17, there has been a 20.44 per cent rise in cumulative FDI flows into the Indian engineering industry.
  • In February 2017, the World Bank signed an agreement with the Government of India, for providing a loan of US$ 201.50 million, for facilitating development of infrastructure to impart quality engineering education across various states in India. The loan being a part of the Technical Education Quality Improvement Project (TEQIP III), is in the 3rd phase of 15-20 year programme, which begun in 2002
Growth

Notes: FY18* - up to December 2017
Source: Department of Industrial Policy and Promotion

Last Updated: July, 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 market size 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-Jun 2018 stood at US$ 20.47 billion.

Construction equipment industry recorded sales of 78,109 and 66,613 units of construction equipment in 2017 and 2016 respectively. This is further expected to grow to around 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$ 3,419.76 million during April 2000 to March 2018.

Indian Engineering and Capital Goods Industry Report (July, 2018)

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Indian Engineering and Capital Goods Industry Report (June, 2018)

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Click to access the Engineering and Capital Goods Industry Archived Report

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