The Engineering Industry In India Engineering Essay

The Engineering Industry in India is one of the largest and most widely spread sector. The sector comprises of heavy engineering and light engineering where heavy engineering sector includes sub-segments like Manufacturing industry, Cement machinery, Sugar Machinery, Metallurgical Machinery, Machine tool, Material handling equipment, Mining machinery and dairy machinery. The Light engineering sector includes sub-segments like Welded steel Pipes and tubes, Process control instrument, antifriction roller bearing and pain paper copier. The engineering sector of India employees over 4 million skilled and semi-skilled workers, directly or indirectly.

Heavy Engineering Industry:

Heavy engineering industry contributes to 80% of the total engineering industry in India. In the year 2009, heavy engineering sector registered a growth of 7.6% in first eight months (April – November 2009) of the year, as compared to 4.1% in the previous corresponding term.

In the sub-segments of heavy engineering, growth of manufacturing industry has provided a stimulus for the engineering sector of India. It has helped Indian manufacturers to choose from the wide range of industrial machinery with advanced manufacturing technology. In 2009, manufacturing sector recorded a growth of 7.7% in the first eight months (April – November) as compared to 4.2% in the last corresponding term. In the same term, capital goods recorded a growth of 7%, mining and electricity sector registered 8.3% and 6.3% growth respectively. Growth trends of engineering industry in India can be observed from the following table –

Industrial growth indicators

(Growth Rate in per cent)

Item

Weight (%)

2007-08

2008-09

Apr-Nov

2008-09

Sectorial Growth Rates based on IIP

Overall

100

8.5

2.8

4.1

Mining and Quarrying

10.5

5.1

2.6

3.4

Manufacturing

79.4

9.0

2.8

4.2

Electricity

10.2

6.4

2.8

2.8

Use-Based Classification

Overall

100

8.5

2.8

4.1

Basic Goods

35.6

7.0

2.6

3.6

Capital Goods

9.3

18.0

7.3

8.4

Intermediate Goods

26.5

9.0

-1.9

-0.7

Consumer Goods

28.7

6.1

4.7

6.8

I) Durables

5.4

-1.0

4.5

5.1

II) Non-durables

23.3

8.6

4.8

7.3

Figure: Showing Industrial growth across various sectors.

Source: Ministry of Heavy Industries and Public Enterprises, Annual Report 2009 – 10.

The performance of the engineering industry immensely depends upon the power programs of Government of India (GOI). As per the 11th Five year plan (2007 – 2012), GOI has a mission of ‘Power for All by 2012’ which plans to add 78,577 MW of electricity to the total power generation by 2012. This mission of GOI provided a strong base for Heavy electrical equipment manufacturers.

Figure: Showing Total production in 2008-09 and 2009-10.

Light Engineering Industry:

Light engineering industry is one of the largest segment and most diversified sectors of the Indian engineering industry. It contributes to 20% of the total engineering industry in India. Since light engineering industry being a labor intensive industry, it provides abundance of employment opportunities to skilled and semi-skilled workers.

Indian light engineering industry is estimated to be US $7 billion industry, which is majorly contributed by strong capital base goods, exports of forgings, fasteners, bearings, steel pipes, tubes, medical instruments etc. In India, light industry accounts major importance for the development of the nation, as it is the basis of almost all industrious and commercial activities.

Light engineering is a diverse industry comprising of various sub-segments, like roller bearing industry where automobile sector accounts 35% of the total demand and electricity industry shares 12%. The industry has around 20 organized sectors engaged in manufacturing 500 different types of ball and roller bearings. The Indian ferrous casting industry is the fifth largest in the world. The sector has been de-licensed and therein, is eligible for automatic approval up to 100% FDI. Process control instruments industry is de-licensed and thus is eligible for automatic approval up to 100% FDI. Industry has 26 units in organized sector involved in manufacturing of process control instruments and systems.

The growth and development of the light engineering industry depends upon the steps taken by the government, as the establishments of the new private units will therein lead to the development of the industry. Industry is also very important and responsible for the manufacturing of various final products and improving the life of the people. Thus the Light engineering holds immense potential for development of the industry will lead to the creation of better and developed infrastructure of the nation.

Industry Segments

Number of Players

HEAVY ENGINNERRING

Automotive

617

Heavy Engineering and Machine tools

443

Heavy Electrical

144

LIGHT ENGINEERING

High Technology Products

673

Low technology Products

826

Figure: Sowing Number of players operating across segments.

Source: Centre of Monitoring Indian Economy, January 08, 2010.

Opportunities:

Indian states provide great scope of opportunities for the foreign as well as for domestic investors. The engineering industry attracts investment into manufacturing industry, infrastructure development, electricity generation/transmission equipment, earthmoving machinery, thermal equipment etc. Major states which attract investments are Maharashtra, Gujarat and Tamil Nadu.

For maintaining the targeted growth rate of 9%, development of infrastructure will play a very massive role. Infrastructure development is the key to success for achieving the targeted growth rate and thus surge in infrastructure spending is expected to US $23 billion by 2009 to 2011. Power industry also accounts to 41% of the total investment.

Another key driver for the growth in this industry is to emerge India as a manufacturing hub, as India is the one of the most preferred destinations for outsourcing services due to lower labor cost and better engineering and designing capabilities.

The emergence of, outsourcing engineering services has given a new dimension to the growth of the engineering sector in India. Various services like new product design, design and maintenance of manufacturing systems, which are outsourced to countries like India and China has provided a robust base for development of nation and the sector. Indian engineering sector has immense potential for future growth and development in sub-segments like automotive industry, manufacturing industry which will evolve as great market for industrial goods and will also generate pool of technical human resource.

Contact Information:

Shri Praful Patel

Minister, Ministry of Heavy Industries and Public Enterprises

Phone: +911123063598

Mailing Address: 155, Udyog Bhavan

New Delhi – 110011

Website: www.dhi.nic.in

Shri A. Sai Prathap

Minister of State, Ministry of Heavy Industries and Public Enterprises

Phone: +911123061149

Mailing Address: 176, Udyog Bhavan

New Delhi – 110011

Website: www.dhi.nic.in