3. Source: Dept of Heavy Industries, India Electrical and Electronics
Manufacturer Association, NASSCOM, Aranca Research
Notes: CG - Capital Goods, ER&D - Engineering Research & Design
Increasing industrialisation and economic
development to drive capital goods &
engineering market
Expansion in the electrical equipment
industry
Engineering research & design segment
revenues to increase fourfold by 2020
Capital goods & engineering turnover is
expected to reach USD125.4 billion by
2017 from USD57.6 billion in 2012
Electrical equipment market size expected
to reach to USD105 billion by 2022 from
USD24.2 billion in 2011
ER&D revenues projected to reach to
USD45 billion in 2020 from USD11.2
billion in 2012
57.6
125.4
2012 2017
CG & Engineering turnover
CAGR: 16.8%
24.2
105
2011 2022
Electrical equipment market size
CAGR: 14.2%
11.2
45
2012 2020
ER&D revenue
CAGR: 19.0%
4. Source: Booz & Company, Volvo India Ltd, Estimates,
Ministry of Heavy Industries and Public Enterprise, Aranca Research
Note: DHI - Dept. Of Heavy Industries, CPSE - Central Public Sector Enterprise
Indian construction equipment market to
grow sevenfold from 2012 to 2020
Indian telecom equipment market to more
than double by 2020
Increased production of Central Public
Sector Enterprise (CPSE)
Construction equipment market projected
to reach USD22.7 billion by 2020 from
USD3 billion in 2012
Telecom equipment market to reach
USD37 billion by 2020 from USD16 billion
in 2011
Production of CPSE under DHI to
aggregate USD10.7 billion by 2014 from
USD9.2 billion in 2011
3
22.7
2012 2020
Construction equipment market revenue
CAGR: 28.8%
16
37
2011 2020
Telecom equipment market size
CAGR: 9.7%
9.2
10.7
2011 2014
Production of CPSE's
CAGR: 5.4%
5. • The engineering sector is delicensed;
100 per cent FDI is allowed in the
sector
• Due to policy support, there was
cumulative FDI of USD14.0 billion into
the sector over April 2000 – February
2012, making up 8.6 per cent of total
FDI into the country in that period
Growing demand
Source: Government of India, Ministry of Heavy Industries, Department of Industrial Policy & Promotion,
India Electrical and Electronics Manufacturer Association, Aranca Research
Notes: FDI - Foreign Direct Investment, FY - Indian Financial Year (April – March), USD - US dollar
Growing demand
• Capacity creation in sectors such
as infrastructure, power, mining,
oil & gas, refinery, steel,
automotives, and consumer
durables driving demand in the
engineering sector
• Rising demand for electrical and
construction equipment
Attractive opportunities
• Nuclear capacity expansion to
provide significant business
opportunities to the electrical
machinery industry
• Rapid increase in
infrastructure investment and
industrial production to fuel
further growth
Policy support
• De-licensed engineering sector; 100
per cent FDI permitted
• Cumulative FDI totalled USD19.9
billion over April 2000–April 2013
due to policy support
Higher investments
• Comparative advantage vis-à-vis
peers in terms of manufacturing
costs, market knowledge,
technology and creativity
• Highly organised sector and
dominated by large players
employing over four million skilled
and semi-skilled labour
Engineering
exports
from India:
USD56.7
billion
FY14E
Engineering
exports
target from
India:
USD125.0
billion
Advantage
India
FY13
7. Source: Ministry of Heavy Industries and Public Enterprise Annual Report 2012-13, Aranca Research
Notes: MW - Mega Watt, KVA - KiloVolt - Ampere
Boilers
• The Indian boiler industry has the capability to manufacture boilers with super critical
parameters up to 1000 MW unit size
• The industry’s market size was USD5.1 billion in FY12 and is expected to reach USD11.7
billion in FY22
Turbines and generator
sets
• The industry manufactures various turbines in the range of 800–7000 MW per annum, and
generators ranging from 0.5 KVA to (ones even higher than) 250,00 KVA
• Total production of turbines and generators stood at US2.2 billion in FY12 and is
estimated to reachUSD6.7 billion by FY22
Transformers
• A whole range of power and distribution transformers, including special type of
transformers required for furnaces, electric tracts and rectifiers, are manufactured in the
country
• The transformers market in India was valued at USD2.7 billion in FY11 and is expected to
reach USD11.1 billion in FY22
Switchgear and control
gear
• About 32.6 million switchgears and control gears were produced during FY12
• The switchgear market size touched USD2.0 billion in FY12 and is projected to reach
USD8.2 billion in FY22
8. Source: Ministry of Heavy Industries and Public Enterprise Annual Report 2012-13, Cabinet Committee on Infrastructure report, Aranca Research
Notes: TPD - Tonnes Per Day
Machine tools
• This segment churns out basic machinery for all major industries and determines
competitiveness in other sectors such as automobiles, heavy electrical and defence
• Nearly 200 machine tool manufacturers are operational in the organised sector along with 400
small-scale units
• Production of machine tools totalled USD900 million, while exports stood at USD288.7 million
in FY12
Textile machinery
• It comprises over 1,446 units involved in churning out machinery and components; another
600 units manufacture complete machinery
• The industry is de-licensed with FDI permitted up to 100 per cent
• The industry has an installed capacity of USD1.7 billion and produced goods worth USD1.1
billion in FY12
• In FY12, total exports from textile industries stood at USD368.8 million
Cement machinery
• Cement plants based on raw mill grinding, pre-processing and cement grinding process
technology (for capacities up to 10000 TPD) are being manufactured in India
• Currently,100 per cent FDI is allowed under the automatic route
• With an installed capacity of around USD125 million, the industry is capable of catering to the
domestic demand
Material handling
equipment
• With around 50 units in the organised sector, the material handling equipment industry is
engaged in the setting up of coal/ore/ash handling plants and manufacturing associated
equipment
• The sector’s total imports stood at USD331 million in FY12, while exports aggregated
USD31.9 million
9. Source: Ministry of Heavy Industries and Public
Enterprise Annual report 2012-13, Aranca Research
Plastic processing
machinery
• There are 11 major and nearly 200 small & medium manufacturers
• Domestic manufacturers cater to 95 per cent of the processing industry’s needs
• Total production stood at USD0.6 billion in FY12
• Exports increased 17.1 per cent to USD124.1 million in FY12
Dies, moulds & tools
industry
• It includes over 500 commercial tool manufacturers
• Nearly18 governments tool rooms as well as training centres are operating in the country
• Total production of dies, moulds & tools stood at USD2.8 billion
• Exports aggregated USD604.7 million in FY12
Process plant
equipment
• Over 200 manufacturers are engaged in the production of process plant machinery
• Nearly 65 per cent of the total manufacturers are small and medium enterprises
• Production and exports totalled USD4.1 billion and USD788.1 million, respectively, in
FY12
Earth moving and
mining equipment
• Currently, 20 large and global manufacturers, and 200 small & medium manufacturers
operate in the industry
• Production and exports totalled USD3.8 billion and USD274.9 million, respectively, in
FY12
10. Source: Ministry of Heavy Industries and Public Enterprise Annual Report 2012-13,
Cabinet Committee on Infrastructure report, Aranca Research
Note: * From April 2012 to November 2012, ** CAGR calculated on Indian rupee
Passenger and utility
vehicles
• Currently, there are 16 manufacturers of passenger cars and multi-utility vehicles, 13
manufacturers of commercial vehicles and 16 manufacturers of two-wheelers and three-
wheelers
• Total production in the automobiles sector stood at approximately 20.4 million units in
FY12 and 13.7 million units over FY13*
• Total exports stood at 2.9 million units during FY12 and 1.9 million units over FY13*
Auto components
• The auto components industry has more than 500 companies in the organised sector and
about 10,000 entities in the unorganised sector
• The industry’s turnover expanded at a CAGR of 19 per cent between FY08 and FY12 to
USD43.9 billion from USD22.2 billion
• During FY08-12, exports increased at a CAGR** of 22 per cent to reach at USD7.0 billion
Agriculture machinery
• The agriculture machinery sector is primarily dominated by agricultural tractors
• The Indian tractor industry is the world’s largest and accounts for one-third of the global
production
• More than 250,000 tractors are manufactured every year by 13 manufacturers
• Indian tractors are exported to the US, Malaysia, Turkey and Africa
11. Source: Ministry of Heavy Industries and Public Enterprise Annual Report 2012-13, IVG Research, Aranca Research
Notes: MMT - Million Metric Tonnes
Casting and forging
• The Indian casting industry produces 6 MMT of various grades of casting and ranks sixth
in the world
• The forging industry comprises around 10 organised players, with nearly 100 players in
the small and medium sector
• The industry exports a substantial part of its production apart from catering to the local
demand
Medical and surgical
equipment
• The medical and surgical equipment industry manufactures a wide range of medical
equipment such as ECG and X-ray scanners
• The industry is highly fragmented and dominated by small players
• The indigenous industry caters to 40 per cent of the demand and the remaining is met
through imports
Industrial fasteners
• The fastener industry in India can be classified into high tensile and mild steel fasteners
• Mild steel fasteners are primarily manufactured by the unorganised sector, while the high
tensile steel segment is dominated by the organised sector
• Total Industrial fasteners exports stood at USD621.9 million in FY13, a growth of 13.8 per
cent from FY12
12. Source: Reserve Bank of India, Engineering Export Promotion Council,
Ministry of Commerce & Industry Estimates, Aranca Research
Note: P - Data for FY12 is provisional,
R - Data for FY11 is revised
India’s engineering exports (USD billion)Indian engineering exports stood at USD56.7 billion in FY13
Over FY08–13, exports registered a CAGR of 12.6 per cent
Engineering exports include transport equipment, capital
goods, other machinery/equipment and light engineering
products such as castings, forgings and fasteners
Exports target for FY14 is estimated at USD125 billion
To boost engineering trade, “India Engineering Sourcing
Show 2013” was held by the Engineering Export Promotion
Council (EEPC) in March
64 countries participated in the show and there were
320 exhibitors including 60 overseas companies
418 business enquiries worth USD38.0 million
received by the respondents
31.3
45.3
38.3
58.1
67.1
56.7
FY08 FY09 FY10 FY11R FY12P FY13
CAGR: 12.6%
13. Source: Engineering Export Promotion Council, Aranca Research
Exports performance of principle commodities
(FY13)
Transport equipment is the leading contributor to
engineering exports. The segment accounted for 32.5 per
cent of the total engineering exports during FY13
Machinery and instruments is the other major contributor
with a share of 26.8 per cent
The engineering sector retained its 18 per cent share in
overall exports from the country which is the maximum in
terms of sectoral contribution
32.5%
26.8%
17.7%
9.0%
14.1%
Transport equipment
Machinery and
instrument
Manufactures of
metals
Primary and semi
furnished iron & steel
Others
14. Source: Company Reports, News Article, Bloomberg, Aranca Research
Note: Financial Year Ending * 30 September 2012, ** 31 December 2012
Company Revenues (FY13) Products
Larsen & Toubro USD28.3 billion
Engineering & Construction,
Cement, Electrical & Electronics
Bharat Heavy Electricals Ltd USD9.3 billion
Power Generation, Transmission,
Transportation
Siemens India Ltd USD2.6 billion*
Power Generation and Distribution
Equipment, Transportation
Systems, Communication and
Healthcare Products
ABB Ltd USD1.4 billion** Transformers, Switch Gears,
Control Gears
Crompton Greaves Ltd USD2.1 billion
Power Generation and
Transmission Equipment
15. Company Revenues (FY13) Products
Engineers India
USD0.5 billion
Highways & Bridges, Mass Rapid
Transport Systems Construction,
Specialist Materials Manufacturing
Kirloskar Oil Engines Ltd USD0.4 billion
Engines, Engine Bearings & Valves,
Grey Iron Casting
Cummins India Ltd USD0.8 billion
Power Generation, Construction
and Mining Equipment, Fire Pumps
& Cranes, Compressors
Thermax USD1.0 billion
Boilers and Heaters, Air Pollution
and Purification, Absorption Cooling
BGR Energy USD0.6 billion Boilers, Turbines, Generators
Source: Company Reports, News Article, Aranca Research
16. Source: Aranca Research
Note: BHEL - Bharat Heavy Electricals Ltd
Diversification
• Several companies in the engineering sector have diversified, either geographically
(mainly to Middle Eastern countries) or sector-wise
• BHEL plans to foray into Ukraine
• Simplex Infra has moved to the Middle East
• Larsen & Toubro (L&T) has diversified into power equipment manufacturing
• Thermax entered the power utility segment
Shift to value-added
products
• Rising competition is driving domestic players to focus on improving their capabilities,
become more quality conscious, and upgrade their technology base in line with global
requirements
• More than 2,500 firms in the engineering sector have ISO 9000 accreditation
• Companies are now increasingly focusing on R&D and product development
Entry of international
companies
• With 100 per cent FDI allowed through the automatic route, major international players
such as Cummins, ABB and Alfa Laval have entered the Indian engineering sector due to
growth opportunities
• Entry of new players has raised the industry’s competitiveness
17. Growth
drivers
Demand-side
drivers
InvestmentPolicy
• De-licensing
• Reduction in tariff and
customs
• Supportive government
policies leading to
higher investments
• Increasing FDI inflows
• Higher M&A
• Easy credit facilities for
manufacturing
companies
• Capacity addition for
power generation
• Increase in
infrastructure spending
• Rise in exports
18. Energy requirement (‘000’ MU)India’s energy requirement increased at a CAGR of 6.7 per
cent over FY06–13 to 995.5 billion units
Demand for energy grew 6.2 per cent during FY13 vis-à-vis
the previous year
Higher demand for energy has led to increasing capacity
additions for power generation that, in turn, boosted
demand for power generation and transmission equipment
Source: Ministry of Power, Annual report 2012-13,
Load Generation Balance Report 2012-13, Aranca Research
Note: MU - Million Unit
632
691
739 777
831 862
937 996
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
CAGR: 6.7%
19. Addition in generating capacity (‘000’ MW)Investments to increase capacity have led to rising demand
for power generation and transmission equipment
Capacity increased to 20600 MW during FY13 compared to
20500 MW in FY12
Source: Ministry of Power, Annual report 2012-13, Aranca Research
Note : MW - Mega watt
8.1
12.1
17.1
22.3
32.9
20.5 20.6
FY90 FY97 FY02 FY07 FY11 FY12 FY13
20. Infrastructure index and growth rateThe Infrastructure Index (part of the wider Index of Industrial
Production) comprises eight core industries: coal, crude oil,
natural gas, petroleum refinery products, fertilisers, steel,
cement and electricity
The index rose to 144.4 in FY12, implying a CAGR of 5.1
per cent since FY07
The infrastructure index rose to 145.1 over April–December
2012
Source: Reserve Bank of India, Aranca Research
Notes: The base year for Infrastructure index has been changed
from 1993-94 to 2004-05
* - April 2012-December 2012
112.6 118.5 121.8
129.9 138.4 144.4 145.1
0
1
2
3
4
5
6
7
8
9
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
FY07 FY08 FY09 FY10 FY11 FY12 FY13*
21. Total highway length added during Five-Year Plans (KM)
India has one of the largest road networks (4.7 million km), consisting of national highways, expressways, state highways,
districts and village roads
The length of the highways added during the 11th Five-Year Plan was 9,044 km (as of 2011)
During the 11th Five-Year Plan, of the total USD 456.9 billion investments in infrastructure, development of roads and
bridges accounted for 15.3 per cent
Owing to large-scale public and private investments in roads, demand for related machinery has increased significantly
Share in roads network (FY13)
3.3 1.7
95
State highway
National highway
Districts and rural
roads
23,814
7,091
9,044
9th Plan 10th Plan 11th Plan*
Source: National Highway Authority of India, Ministry of Road Transport and Highways, Aranca Research
Notes: * - Physical Achievements under National Highways Development Project during 11th Five Year Plan upto Sept, 2011
22. Source: DHI Annual report 2010-11, Ministry of Power Annual Report, Aranca Research
Notes: GW - Giga Watt
De-licensing
• The engineering industry has been de-licensed and 100 per cent FDI has been permitted
in the sector
• Foreign technology agreements are allowed permitted under the automatic route
Tariffs and custom
duties
• The government has eliminated tariff protection on capital goods
• It has reduced custom duties on a range of engineering equipment
Initiatives focussed on
power generation and
infrastructure
development
• The government has an ambitious mission of ‘Power for all by 2012’ and has planned
capacity additions of 120 GW in the 12th Five-Year Plan
• Governmental infrastructure projects such as Golden Quadrilateral and the North-South
and East-West corridors fuelled growth in the engineering sector
Special Economic
Zones (SEZs)
• The government approved a significant number of SEZs across the country for the
engineering sector
• Delhi Mumbai Industrial Corridor (DMIC) is being developed across seven states that is
expected to bolster the sector
National Manufacturing
Policy (2011)
• Government of India launched the National Manufacturing Policy with the aim of
enhancing the sector’s share in GDP to 25 per cent within a decade and creating 100
million jobs by 2022
23. Source: Union Budget FY14
Note: Capex - Capital Expenditure
JNNURM - Jawaharlal Nehru National Urban Renewal Mission
15 per cent investment
allowance to boost
capex
• The government would provide 15 per cent exemption on tax to manufacturing companies
that invest more than USD18.4 million in plant and machinery over FY14–15
Cut in excise duty to aid
the auto industry
• A cut in excise duty on truck chassis from 14 per cent to 13 per cent would increase profit
margins for major automobile companies such as Ashok Leyland and Eicher Motors
Increase in allocation to
JNNURM to aid
infrastructure and
capital goods
• The government has increased the allocation to JNNURM from USD1.3 billion in FY13 to
USD2.6 billion in FY14; this is expected to benefit companies in capital goods,
infrastructure and automobile sectors
Higher allocation to the
defence sector
• Allocation to the defence sector was raised to USD37.5 billion, which includes USD16
billion for modernisation-related expenditure. This could further increase investments in
the defence equipment industry
24. Source: SEZ India, Aranca Research
Developer Location Product
Andhra Pradesh Industrial Infrastructure Corporation
Limited (APIIC)
Ranga Reddy, Andhra Pradesh Aerospace and precision engineering
Deccan Infrastructure and Land Holdings Ltd Nalgonda, Andhra Pradesh Light engineering
M/s Essar Hazira SEZ Hazira, Gujarat Engineering
Gujarat Industrial Development Corporation Ltd (GIDC) Gandhinagar, Gujarat Electronic products
N.G. Realty Pvt Ltd Ahmedabad, Gujarat Engineering
M/s Synefra Engineering and Construction Ltd Vadodara, Gujarat
High-tech engineering and related
products
E. Complex Pvt Ltd Amreli, Gujarat Engineering
Dishman Infrastructure Ltd Ahmedabad, Gujarat Engineering
Ansal Properties and Infrastructure Ltd Sonepat, Haryana Engineering
Raheja Haryana SEZ Developers Pvt Ltd Gurgaon, Haryana Engineering
Ansal Kamdhenu Engineering SEZ Ltd Sonepat, Haryana Engineering
Karnataka Industrial Areas Development Board Shimoga, Karnataka Engineering
Suzlon Infrastructure Ltd Mangalore, Karnataka
Port-based for high-tech engineering
products
25. Developer Location Product
Quest Machining and Manufacturing Pvt Ltd Belgaum, Karnataka
Auto, aerospace and industrial
engineering
Viraj Profiles Ltd Thane, Maharashtra Stainless steel engineering products
Navi Mumbai SEZ Pvt Ltd
Navi Mumbai,
Maharashtra
Light engineering
Maharashtra Industrial Development Corporation (MIDC) Satara, Maharashtra Engineering
Township Developers India Pvt Ltd Pune, Maharashtra Engineering
Maharashtra Industrial Development Corporation (MIDC) Aurangabad, Maharashtra Engineering & Electronics
Orissa Industrial Infrastructure Development Corporation
(IDCO)
Jajpur, Orissa Metallurgical engineering
Vividha Infrastructure Pvt Ltd Patiala, Punjab Engineering
Mahindra Worldcity (Jaipur) Ltd Jaipur, Rajasthan Light engineering
New Chennai Township Pvt Ltd Kanchipuram, Tamil Nadu Engineering
Perundurai Engineering SEZ by SIPCOT Erode, Tamil Nadu Engineering
Uttar Pradesh State Industrial Development Corporation
(UPSIDC)
Kanpur, Uttar Pradesh Engineering
Source: SEZ India, Aranca Research
26. Source: Department of Industrial Policy & Promotion, Aranca Research
Note: FY10 - Cumulative from April 2000 to March 2010 and so on
FDI inflows includes Automobile industry, Electrical equipment, Miscellaneous
mechanical and engineering industry, Industrial machinery, Machine tools,
Agriculture machinery, Earth-moving machinery and Industrial instrument
Cumulative FDI inflows in Engineering sector
(USD billion)
Cumulative FDI inflows increased to USD17.3 billion in
FY13 from USD8.9 billion in FY10
With the increasing focus by government to attract foreign
investors in manufacturing and infrastructure, FDI in the
sector is set to rise
8.9
11.1
14.7
17.3
FY10 FY11 FY12 FY13
27. Source: Grant Thornton, Aranca Research
Note - * - Acquired by its German subsidiary- Geometric Europe GmbH
M&A deals
Acquirer Target Type Acquisition date
Geometric * 3Cap Technologies GmbH Acquisition January, 2013
Simplex Infrastructures Ltd Joy Mining Services India Pvt Ltd Acquisition May, 2012
Larsen & Toubro Ltd Thalest Ltd Acquisition April, 2012
Titagarh Wagons Ltd Titagarh Marine Ltd Acquisition March, 2013
JBM Cadmium Pvt Ltd Tesco GO Acquisition January, 2012
Diamond Power Infrastructure Ltd Utkal Galvanizers Ltd Acquisition April, 2011
Yash Birla Group Aircon Engineering Services Majority stake May, 2011
Gaji Mercantile Bharat Wire Ropes Ltd Acquisition July, 2010
HBL Power Systems
Igarashi Group-Agile Electric Drives
Technologies and Holdings
Majority stake December, 2010
28. Source: Company Reports, Indian Express, Aranca Research
Note: ‘Navratna’ is the title given to nine Public Sector Enterprises (by
the Government of India) having distinct comparative advantages
Net sales (USD billion)
3.0 3.9
4.5
5.8
7.1
9.0
10.4
9.2
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
Salient features
• One of the largest engineering and manufacturing
companies with ‘Navratna’ status
• One of the major integrated power plant equipment
(IPPE) manufacturers in the world
• Profit-making company since 1971–72
• Installed base of more than 120,000 MW
• Fifteen manufacturing units, two subsidiaries and
seven joint ventures
• Accounted for over 59 per cent of the total generating
capacity in FY12
29. Key success factors
Boiler
efficiency
Lower
design heat
rate
Better PLFLower
lifecycle cost
Lower
auxiliary
power
consumption
Recent Awards and Recognitions
• Golden Peacock Award 2011 for Occupational Health
and Safety(2011)
• SCOPE Meritorious Award 2010-11 for Best Practices
in Human Resource Management
• Intellectual Property Award from the Government of
India(2011)
• Essar Steel Infrastructure Excellence Award (2011)
• DSIJ Gentle Giant Award from the Government of
India (2011)
• CII-Thompson Reuters Innovation Award (2010)
30. 1960 1970 1980 1986 1990 1996 2000 2004 2005 2006 2007 2008 2011 2012
ISO accreditations
Open Die Forging
Closed Die Forging
Crank Shaft
Front Axle Beams
Hubs
Transmission Parts
Organic growth &
integration
Entry into new
markets such as
US and Greece
Acquisitions in
various countries
FY13
USD1050
million
turnover
FY05
USD245
million
turnover
Joint ventures
and technical
partnerships
Source: Company Reports, Aranca Research
31. Source: Company Reports, Aranca Research
Note: ‘Navratna’ is the title given to nine Public Sector Enterprises (by
the Government of India) having distinct comparative advantages,
HAL- Hindustan Aeronautics Limited
Net sales (USD billion)
2.1
2.3 2.4
2.9 3.0
2.6
FY08 FY09 FY10 FY11 FY12 FY13
Salient features
• One of Asia’s largest aerospace companies with
‘Navratna’ status
• Produced over 3,700 aircraft including 15 types of
indigenous designs and over 4,300 engines
• Nineteen production units and 10 research & design
centres across eight locations in India
• Promoted and established 11 joint venture companies
in collaboration with leading international and Indian
aviation organisations
• Offers services for the aircraft accessories, foundry
and forge, engine, helicopter, industrial & marine gas
turbine division and transport aircraft division
32. Source: Aranca Research
Notes: GW - Giga Watt, SME - Small and Medium Enterprises
Defence
• Budget for the defence sector is expected to grow 8 per cent until 2014; of this, 54 per
cent would be earmarked for procuring manufactured items which is likely to translate into
a market opportunity of USD91 billion over 2010–2014
• Government initiatives, such as allowing private sector participation, have been reinforced
by opening up the sector to 26 per cent FDI, and its offset policy is expected to enhance
private sector (including SME) participation
Civil nuclear sector
• India‘s nuclear capacity is expected to be strengthened by 3.8 GW by 2012; an additional
12,000 MW has been planned under the 12th Five-Year Plan (2012–17)
• It represents a total business opportunity worth USD312 million for the manufacturing
industry, which is likely to garner 61 per cent
Auto components
• Global auto majors are rapidly ramping up the value of components they source from
India, steered by the country’s advanced engineering skills, established production lines, a
thriving domestic automobile industry and competitive costs
• Industry sales are expected to increase to USD40 billion by 2016, with about USD20
billion generated from exports
33. Source: Aranca Research
Power transmission and
distribution (T&D)
• T&D expenditure is set to increase as a result of growth in power generation and
privatisation of distribution
• By the end of 2012, the transmission network was expected to be about 60,000 circuit km,
with a potential demand for 630,000 transformers
Material handling
equipment
• The material handling equipment sector is expected to gain from robust demand from
steel, power, mineral and other infrastructure industries
• Market demand for material handling equipment is estimated at USD30 billion over 2007–
14
Machine tools
• Demand for machine tools from the capital goods sector (especially automobile and textile
industries) is projected to remain high
• Considering the industry's demand for higher productivity, superior precision and
accuracy, as well as low-cost manufacturing solutions, computer numerically controlled
(CNC) machine tools are set to be in greater demand
34. Source: Booz Allen Hamilton, Nasscom, Aranca Research
Notes: ESO is Engineering Services Outsourcing
India Competing countriesIndia Competing countries
~ 20%
25-30%
Total Spend
~ USD850
billion
Projected Spend
USD1100 billion
Offshore Expenditure Onshore Expenditure
~4.5% 15-20%
2009 2020
By 2020, the ESO market in India is expected to reach
USD40–50 billion, propelled by increasing onshore to
offshore movement of services
2009
• The global engineering services spending is
estimated to be around USD850 billion
• About USD40 billion is expected to flow through the
outsourcing channel into vendor countries
• India accounts for about 20 per cent of the
outsourced market
2020
• The global engineering services spending is
projected to reach USD1100 billion
• About USD180 billion is estimated to flow through the
outsourcing channel into vendor countries
• India can account for about 25–30 per cent of this
outsourced revenue
35. Growth in industry size of major electrical equipment
(USD billion)
India‘s electrical equipment industry has witnessed
significant growth in the last few years
Major electrical equipment registered a CAGR of 21.8 per
cent from a small base of USD11.4 billion to USD25 billion
between FY08 and FY12
Major electrical equipment manufactured include capacitors,
energy meters rotating machines, transformers, cables,
switchgears, transmission line towers and conductors
Based on the expected capacity and investments, domestic
demand for electrical equipment is targeted to be USD100
billion by FY22
Demand for T&D equipment is expected to reach USD13.9
billion in FY22 from USD3.4 billion in FY11
11.4 10.2 11.0
13.2
25.0
FY08 FY09 FY10 FY11 FY12
T & D equipment-wise demand projection (USD billion)
3.4
7.4
13.9
FY11 FY17 FY22
CAGR: 21.8%
Source: Indian Electrical and Electronics Manufacturers Association, Department of Heavy Industries
Note: T&D - Transmission and Distribution, BTG - Boilers, Turbine, Generator
36. The generation equipment (BTG) segment is projected to increase to USD25 billion
Production of generation equipment (boilers, turbines and generators) in India is estimated at around USD5.7 billion by 2022
Demand for generation equipment is projected to rise to USD25.1 billion in FY22 from USD6 billion in FY11
Cables contribute 27.3 per cent to the electrical equipment market followed by transmission lines (23.4 per cent), transformers
(19.3 per cent) and switchgear (15.2 per cent)
Market share of electrical equipment (FY13)Generation equipment-wise demand projection
(USD billion)
3.8
5.8
11.7
1.6
3.3
6.7
0.6
3.3
6.7
FY11 FY17 FY22
Boiler Turbine Generator
10.0%
15.2%
27.3%19.3%
0.9%
3.9%
23.4%
Rotating Machines
Switchgear
Cables
Transformers
Capacitors
Energy Meters
Transmission Lines
Source: Indian Electrical and Electronics Manufacturers Association
Notes: BTG - Boiler, Transmission and Generation
37. India’s earthmoving and construction equipment (ECE) industry has enjoyed strong growth over the last seven years due to
rapid economic development
The organised construction sector in India (for example, roads, urban infrastructure) accounts for approximately 55 per cent of
the ECE industry. Mining, irrigation and other infrastructure segments (power, railways) account for the remaining
During FY10–14, sales of construction equipment is expected to increase at a CAGR of 10.6 per cent and reach USD6.5 billion
Earthmoving sector is continuing to make headways and could command a share of 56.2 per cent followed by concrete
equipment and material handling equipment
Product segment-wise CE market by 2014
56.2%
8.5%
19.0%
13.2%
3.0%
Earth moving
Road constrution
equipment
Concrete equipment
Material handling
Material processing
Expected unit sales by 2014
Equipment Sold in 2010 Forecast 2014
Excavators 10500 14000
Backhoes 23000 32000
Loaders 2500 4500
Asphalt pavers 1150 1650
Mobile cranes 8000 11750
Tower cranes 200 700
Transit mixers 3800 9000
Source: Indian Construction Equipment Manufacturer’s Association, NBM media
Notes: CE - Construction Equipment, ECE - Electrical and Construction Equipment
38. National Automotive Testing and R&D Infrastructure Project (NATRiP)
NBCC Place, South Tower,
3rd Floor,Bhishma Pitamah Marg,
Pragati Vihar,Lodhi Road,
New Delhi - 110003
Tel : + 91-11-49215555
Fax : +91-11-24369333
E-mail : team@natrip.in
The Automotive Research Association of India
Survey No 102, Vetal Hill, Off Paud Road,
Kothrud, Pune - 411 038
P.B. No 832, Pune - 411 004
Tel. No : +91-020-30231111
Fax No : +91-020-25434190
Email Id: info@araiindia.com
39. Fluid Control Research Institute
Kanjikode West,
Palakkad - 678623.
Phone : 91-491-2566120/2566206
Fax : 0491-2566326
E-mail : fcri@fcriindia.com
Engineering Export Promotion Council (EEPC)
‘Vanijya Bhawan’, 1st Floor
International Trade Facilitation Centre
1/1, Wood Street
Kolkata, West Bengal–700016
Phone: 91-33-22890651, 22890652
Fax: 91-33-22890654
E-mail: eepc@eepcindia.org
40. BTG : Boilers, Turbines, Generators
BHEL: Bharat Heavy Electricals Limited
MHI: Mitsubishi heavy industries
DHI : Department of Heavy industries
BHEL: Bharat Heavy Electricals Ltd
ICEMA: Indian Construction Equipment Manufacturer’s Association
HAL: Hindustan Aeronautics Limited
IEEMA: Indian Electrical and Electronics Manufacturers Association
EEPC: Engineering Export Promotion Council
TPD: Tonnes Per Day
NHAI: National Highway Authority of India
41. MORTH: Ministry of Road Transport and Highways
CEA: Central Electrical Authority
HVDC: High Voltage Direct Current
USD: US Dollar
FY: Indian Financial Year (April to March)
Wherever applicable, numbers have been rounded off to one decimal
42. Year INR equivalent of one US$
2004-05 44.95
2005-06 44.28
2006-07 45.28
2007-08 40.24
2008-09 45.91
2009-10 47.41
2010-11 45.57
2011-12 47.94
2012-13 54.31
Exchange Rates (Fiscal Year)
Year INR equivalent of one US$
2005 45.55
2006 44.34
2007 39.45
2008 49.21
2009 46.76
2010 45.32
2011 45.64
2012 54.69
2013 54.45
Exchange Rates (Calendar Year)
Average for the year
43. India Brand Equity Foundation (“IBEF”) engaged Aranca to prepare this presentation and the same has been prepared
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