The Index of Industrial Production (IIP) for capital goods (base: 2011-12) registered second consecutive year of growth during 2016-17. The growth rate of 3.2 per cent in the index for capital goods was lower than the growth rate in general index of 4.6 per cent.
During 2016-17, the index for manufacture of machinery and equipment n.e.c. (NIC: 28) and the index for manufacture of computer, electronic and optical products (NIC: 26) registered a y-o-y growth of 7.7 per cent and 2.5 per cent, respectively. On the other hand, the index for manufacture of electrical equipment witnessed a decline of (-) 4.5 per cent during the year.
During 2016-17, exports of machinery increased by 6.5 per cent as compared to the previous year to reach US$ 20.2 billion. Imports of machinery during the same period registered a y-o-y decline of (-) 1.4 per cent to reach US$ 32.8 billion. The USA is the largest market for India’s exports of machinery with a share of 15.5 per cent in the total exports of these products. Germany (share of 5.1 per cent), the UK (4.7 per cent), UAE (4.6 per cent), and Turkey (3.5 per cent) were the other top destinations for India’s exports of these products.
Foreign Direct Investments
Capacity of capital goods industry has grown significantly since liberalization, supported by the inward direct investments in the sector. Cumulative foreign direct investments in the capital goods industry amounted to US$ 15.5 billion during April 2000 to June 2017 period. This was nearly 4.5 percent of the total FDI inflows in the country.
Demand in the capital goods sector is currently propelled by the manufacturing, power and mining industries. This demand is expected to rise, keeping in mind the government’s initiatives for infrastructure development. In addition, investments in power, oil and gas extraction, mining and petrochemical are expected to provide a positive boost for the industry. Industrial growth and development in the manufacturing industry will add to the momentum of the capital goods industry.
Companies selling electrical and electronic goods in the European Union (EU) must conform to the EU legislation for electrical and electronic equipment (EEE), which includes:
The Waste Electrical and Electronic Equipment Directive (WEEE), which sets out the financial and other responsibilities of EEE producers with regard to the collection and recycling of waste from a broad range of EEE at their end of life.
The Restriction of Hazardous Substances Directive (RoHS), which bans the use of certain hazardous substances (such as lead, mercury, cadmium, hexavalent chromium and some polybrominated flame retardants) in EEE.
China RoHS: “Measures for Administration of the Pollution Control of Electronic Information Products (EIP)”, commonly known as RoHS is intended to restrict the use of hazardous materials in electrical and electronic equipment. All products manufactured on or after March 1st 2007 for sale in China must adhere to stage 1 requirements.
Products imported into the country for the purpose of re-export or for manufacturing of other export products are excluded. The following requirements need to be adhered to:
China Compulsory Certification (CCC) mark is required to be obtained by the manufacturers before exporting to or selling products in China. Several electronics product require CCC mark.
South Korea promulgated the Act for Resource Recycling of Electrical and Electronic Equipment and Vehicles on April 2, 2007. This regulation has aspects of RoHS and WEEE.
California has passed the Electronic Waste Recycling Act of 2003 (EWRA). This law prohibits the sale of electronic devices after January 1, 2007, that are prohibited from being sold under the EU RoHS directive, but across a much narrower scope that includes LCDs, CRTs, and the like and only covers the four heavy metals restricted by RoHS. EWRA also has a restricted material disclosure requirement. Several other states that have mercury and PBDE bans.
For further details on Regulations applicable in various geographies, refer to this link: http://www.standardsmap.org/identify