The Indian Engineering sector has witnessed a remarkable growth over the last few years driven by increased investments in infrastructure and industrial production. Growth in the sector is driven by various sub-sectors such as infrastructure, power, steel, automotives, oil & gas, consumer durables etc. India’s manufacturing sector could touch US$ 1 trillion by 2025.
India exports transport equipment, capital goods, other machinery/equipment and light engineering products such as castings, forgings and fasteners to various countries of the world.
Many foreign investors have decided to invest in the country in the recent past due to low cost of setting up of plants and available manpower.
For instance, Toshiba Group has planned to make India the design, manufacturing and export hub for its lighting business, and multiply the local headcount to design lights for planned smart cities airports, stadiums, highways, warehouses and factories, said Mr. Yoichi Lbi, President & CEO, Toshiba Lighting & Technology Corporation.
The growth can be credited to the robust expansion in shipments of aircraft, spacecraft parts and automobiles. India exports its engineering goods mostly to the US and Europe, which accounts for over 60 per cent of the total exports. Recently, India's engineering exports to Japan and South Korea have also increased with shipments to these two countries rising by 16 and 60 per cent respectively. Electronics goods production in India is expected to touch US$ 104 billion by 2020 and the electronic market is anticipated to grow to US$ 400 billion by 2020 and expand at a CAGR of 24.4 per cent during the period 2012-2020.
The domestic market size of the chemical industry is around US$ 118 billion and it is approximately 3 per cent of the global chemical market, it is highly diversified with more than 80,000 chemicals and currently accounts for 15 per cent of manufacturing GDP which makes it very crucial for the economic development of the country.
Few of current foreign Investments
There have been many major investments and developments in the Indian engineering and design sector, which are as follows:
Government Initiatives and Future Plans
Government's `Make in India' campaign has got the attention of several in infrastructure and engineering multi nationals including GE and ThyssenKrupp, which are considering investing in the country.
The sector has been de-licensed and enjoys 100 per cent FDI (Foreign Direct Investment), with the aim to boost the sector; it has also reduced the basic customs duty from 10 percent to 5 per cent on forged steel rings used in the manufacture of bearings of wind operated electricity generators.
The government has also taken steps to improve the quality of technical education in the engineering sector by allocating a sum of Rs 500 crores (US$ 78.8 million) for setting up five more IITs (India Institute of Technology) in the states of Jammu, Chhattisgarh, Goa, Andhra Pradesh and Kerala.
The engineering sector is a growing market which is likely to grow upto US$ 1.1 trillion by 2020. Associated sectors such as automotive, industrial goods and infrastructure, coupled with a well-developed technical human resources pool, engineering exports are expected to touch US$ 120 billion by 2015.Also, the Union Budget 2014-15 has allocated funds for several infrastructure projects which are further expected to provide a boost to the engineering sector. The industry can also look forward to deriving revenues from newer services and from newer geographies with Big Data, Cloud, M2M and Internet of Things becoming a reality.