The engineering sector in India encompasses a number of sub-sectors. The sector has a very close association with the manufacturing and infrastructure sectors. It can be broadly classified into two parts, i.e., heavy and light engineering. Leading players in the heavy engineering sector manufacture heavy engineering goods, which are high in value and use a high level of technology. Heavy engineering has many sub-sectors including textile machinery, cement machinery, earth-moving and construction, machine tools, paper and packaging machinery, material handling machinery, etc.
On the other hand, manufacturers of light engineering goods utilise a lower level of technology. Light engineering sub-sectors include castings and forgings, medical and surgical equipment, industrial fasteners, roller bearings, etc. Since the engineering sector is linked with various key industries, it is of immense strategic importance to the Government of India.
The engineering sector in India has grown and developed significantly over the years. Sectors such as infrastructure, power, mining, oil and gas, refinery, steel, automotive, and consumer durables have been responsible for the growth. In 2014-15, India’s engineering exports were valued at USD 78 billion, which was an increase of about 11% from 2013-14. Accounting for about 25% of the total exports in 2014-15, the engineering sector remains one of the main contributors to Indian exports. Furthermore, the engineering and capital goods turnover is expected to reach USD 125 billion by 2017.
The engineering sector has also attracted immense interest from foreign players due to India’s competitive advantage in manufacturing costs, technology and innovation. FDI inflows into the Indian engineering sector stood at USD 4 billion, during the period of April 2000 to June 2015. The Government of India is encouraging investments in the vital engineering sector by de-licensing and allowing 100% FDI.