National Policy on Capital Goods (NPCG) 2016 envisages:
- Increasing production of capital goods from ~$43.2bn in 2014-15 to $115bn in 2025 raising direct and indirect employment from the current 8.4 million to ~30 million
- Increasing exports from the current 27% to 40% of production
- Increasing share of domestic production in India's demand from 60% to 80%
-100% FDI allowed under automatic route
Building India of tomorrow
India’s Capital Goods manufacturing industry serves as a strong base for its engagement across sectors such as engineering, construction, infrastructure, and consumer goods amongst others. The sector contributed ~USD 9.3 bn to exports in 2014-15.
100% FDI has been allowed in the sector ensuring presence of many foreign players. Capital Goods sector provides approximately 1.4 mn direct and 7 mn indirect jobs.
Market-oriented reforms, such as "Power for All" along with plans to add 93 GW by 2022 will generate huge demand for power transmission and distribution (T&D) equipment.
- By 2022, the electrical equipment industry, comprising generation and T&D equipment, is targeted to reach a size of USD 100 bn.
- By 2022, the T&D equipment segment is targeted to reach a size of USD 75 bn
100% FDI is allowed under the automatic route
for more details refer FDI Policy 2017
- By 2025, direct & indirect employment expected to reach 5 mn and 25 mn respectively
- Indian generation and T&D equipment market to reach USD 100 bn by 2022
- Indian heavy electrical equipment is the largest sub-sector followed by process plant equipment and earthmoving & mining machinery
The capital goods sector has a market size of USD 43.2 bn.
The sector is further divided into 10 sub-sectors where heavy electrical equipment is the largest sub-sector followed by process plant equipment and earthmoving & mining machinery. The market size of each of the sub-sectors is as follows:
- Heavy Electrical Equipment: USD 24.2 bn
- Process Plant equipment: USD 3.7 bn
- Earthmoving & Mining Machinery: USD 3.3 bn
- Printing Machinery: USD 3.01 bn
- Food Processing machinery: USD 2.4 bn
- Dies, Moulds & Press Tools: USD 2.3 bn
- Textile Machinery: USD 1.8 bn
- Machine Tools: USD 1.4 bn
- Plastic Machinery: USD 0.5 bn
- Metallurgical Machinery : USD 0.4 bn
- Contribution to manufacturing
- Direct employment to (no. of people)
- Heavy elec. equipment (CAGR 5 years)
- Heavy elec. equipment exports share
FDI inflows (in USD) in electrical equipment during April 2000 - September 2017
FDI inflows (in USD) in industrial machinery during April 2000 - September 2017
FDI is allowed under the automatic route in the electrical machinery sector
November 2017 - The Central government plans to spend USD 459.7 mn to implement various programs under the National Capital Goods Policy
February 2016 - One of the world's leading engineering machinery manufacturers, China's Sany Heavy Industry plans USD 9.8 bn of investments