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Engineering Industry in India

Engineering Industry in India

Description

Engineering Industry in India

Introduction

Welcome to Reliance Industrial Plots.

Reliance MET is offering Industrial Land to arrange Engineering and Capital Goods Plant Jhajjar. The Government of Haryana has supported Reliance Industrial Plots Jhajjar as Model Economic Township - Reliance MET.

India's designing area has seen a striking development in the course of the most recent couple of years driven by an expanded interest in framework and mechanical creation. The designing area, being firmly connected with the assembling and foundation areas, is of vital significance to India's economy.

India, on its mission to turn into a worldwide superpower, has made critical steps towards fostering its designing area. The Government has designated Engineering Export Promotion Council (EEPC) as the zenith body accountable for the advancement of designing merchandise, items, and administrations from India.

India trades transport hardware, capital merchandise, other apparatus/gear, and light designing items like castings, forgings, and latches to different nations of the world. The Indian semiconductor industry offers a high development likely region as ventures which source semiconductors as sources of info are themselves seeing popularity.

India turned into a super durable individual from the Washington Accord (WA) in June 2014. The nation is presently a piece of a selective gathering of 17 nations who are extremely durable signatories of the WA, a first-class peaceful accord on designing investigations and versatility of architects.

Market Size

Turnover of the capital goods industry was estimated at US$ 92.00 billion in 2019 and is forecast to reach US$ 115.17 billion by 2025.

India exports engineering goods mostly to the US and Europe, which account for over 60% of the total export. Engineering exports reached US$ 75.90 billion in FY20 and reached US$ 39.90 billion in FY21 (between April 2020 and October 2020). Index of industrial production (IIP) for the electrical equipment industry stood at 105.5 in FY20.

Investments

The designing area in India draws in massive interest from unfamiliar players as it partakes in a relative benefit as far as assembling cost, innovation, and development. The abovementioned, combined with positive administrative approaches and development in the assembling area, has empowered a few unfamiliar players to put resources into India.

As indicated by The United Nations Conference on Trade and Development (UNCTAD), India positioned among the main 10 beneficiaries of Foreign Direct Investment (FDI) in 2019, drawing in US$ 49 billion in inflows, a 16% expansion from the earlier year, driving FDI development in South Asia.

FDI inflows for various mechanical and designing areas remained at US$ 3,650.78 million between April 2000 and September 2020 as per the information delivered by the Department for Promotion of Industry and Internal Trade (DPI).

In the recent past, there have been many major investments and developments in the Indian engineering and design sector:

  • In December 2020, Daimler India (a commercial vehicle maker), which recently set up 10 new touchpoints, is focusing on network expansion. The company plans to have at least 350 dealerships pan-India by 2022.
  • In December 2020, Larsen & Toubro (L&T) has won multiple orders to supply mining equipment to coal, cement, and iron ore sectors. The contract’s scope includes the supply of equipment and maintenance contracts to support operations over 3-4 years.
  • In November 2020, Larsen & Toubro delivered the first hardware—a booster segment—for the Gaganyaan Launch Vehicle to ISRO, ahead of schedule.
  • In November 2020, BHEL, a state-owned engineering firm, set a record by successfully developing and testing the highest-rated autotransformer in India. At the National High Power Test Laboratory (NHPTL) in Madhya Pradesh, BHEL successfully developed and tested the autotransformer.
  • In November 2020, Mahindra Logistics Ltd., a supply chain management service provider, has developed a ‘built-to-suit warehousing capacity in Tamil Nadu. This workspace would cater to two key customers in the e-commerce and auto-engineering industries. The facility is focused on offering integrated solutions to an e-commerce player and a German auto-component supplier.
  • In November 2020, Samsung partnered with IIT-Jodhpur to establish AR-VR Innovation Lab. In cooperation with the faculty of the Department of Computer Science and Engineering (IIT-Jodhpur), Samsung engineers will provide courses to B.Tech, M.Tech, and Ph.D. students. In addition, the facility will be used by fellow researchers to perform experiments. The laboratory will train up to 35 students a year.

Government Initiatives

The Indian engineering sector is of strategic importance to the economy owing to its intense integration with other industry segments. The sector has been de-licensed and enjoys 100% FDI. With the aim to boost the manufacturing sector, the Government has relaxed the excise duties on factory gate tax, capital goods, consumer durables, and vehicles:

  • The Export Policy Uttar Pradesh 2020-25 for promoting export growth and competitiveness, providing export subsidiaries with the required export-related assistance and services, and creating & improving technical and physical infrastructures to improve exports from state industries.
  • In November 2020, to strengthen the capital goods (CG) sector, the government has set up a 22-member interministerial committee through initiatives, which will help this sector to effectively contribute to the national target of achieving a US$ 5 trillion economy and a US$ 1 trillion manufacturing sector.
  • The Government announced Rs. 150,000 (US$ 2,250) income tax deduction on interest paid on loans for the purchase of electric vehicles the Union Budget 2019 20.
  • The Union Cabinet has approved incentives up to Rs. 10,000 crore (US$ 1.47 billion) for investors by amending the M-SIPS scheme in order to further incentivize investment in the electronics sector, create employment opportunities and reduce dependence on imports by 2020.
  • The government approved the ‘Production Incentive Scheme’ (PLI) for large-scale electronics manufacturing.

Road Ahead

Turnover of the capital goods industry is expected to increase to US$ 115.17 billion by 2025F. India’s engineering R&D market will increase from US$ 36 billion in FY19 to US$ 42 billion by FY22.

India needs Rs. 235 trillion (US$ 3.36 trillion) of investment in infrastructure in the next decade (2020 29).

The export of engineering goods is expected to reach US$ 200 billion by 2030.

Note: Conversion rate used for December 2020 is Rs. 1 = US$ 0.014

Source: IBEF India

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