Production
The Index of Industrial Production (IIP) for capital goods (base: 2011-12) registered third consecutive year of growth during 2017-18. The growth rate of 3.98 % in the index for capital goods was lower than the growth rate in general index of 4.44 %.
During 2017-18, 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 y-o-y growth of 5.58% and 17.15%, respectively. On the other hand, the index for manufacture of electrical equipment witnessed a decline of 12.45% during the year.
Production of engineering goods have been on an upswing, registering a CAGR of 6.7% over the period FY14-FY17. The manufacturing of machine tools, earth moving & mining machinery, plastic machinery, metallurgical machinery and heavy electrical equipment have exhibited impressive CAGR over the same period.
Production of Engineering Goods - Rs. Crore | |||
---|---|---|---|
Sub-Sectors | 2013-14 | 2016-17 | CAGR (FY14-FY17 |
Machine Tools 3481 5803 18.6% | 3481 | 5803 | 18.6% |
Textile Machinery | 6775 | 6650 | -0.6% |
Earthmoving &Mining Machinery | 16000 | 84945 | 16.0% |
Heavy Electrical Equipment | 128823 | 159221 | 7.3% |
Plastic Machinery | 2660 | 3690 | 11.5% |
Process Plant Equipment | 18000 | 19500 | 2.7% |
Dyes, Moulds & Press Tools | 13793 | 14750 | 2.3% |
Printing Machinery | 16069 | 16424 | 0.7% |
Metallurgical Machinery | 1200 | 1525 | 8.3% |
Food processing machinery | 11750 | 13000 | 3.4% |
Total | 218551 | 265508 | 6.7% |
Source: Department of Heavy Industries
Export
India is currently dependent on imports of engineering goods, especially in the sub-sectors of food processing machinery, textile machinery, machine tools and printing machinery. At the same time, indigenous capacity and capability development has impacted export growth positively, reducing trade deficits across the sector. During FY14 to FY17, imports of engineering goods registered a CAGR of 3.2%, while exports witnessed a CAGR of 11.0%.
Imports of Engineering Goods - Rs. Crore |
|||
Sub-Sectors |
2013-14 |
2016-17 |
CAGR (FY14-FY17) |
Machine Tools |
4672 |
6173 |
9.7% |
Textile Machinery |
7546 |
10098 |
10.2% |
Earthmoving &Mining Machinery |
12689 |
14520 |
4.6% |
Heavy Electrical Equipment |
58354 |
55291 |
-1.8% |
Plastic Machinery |
1250 |
1863 |
14.2% |
Process Plant Equipment |
9820 |
11925 |
6.7% |
Dies, Moulds & Press Tools |
3081 |
1200 |
-27.0% |
Printing Machinery |
6042 |
7734 |
8.6% |
Metallurgical Machinery |
3817 |
2202 |
-16.8% |
Food processing machinery |
5200 |
12656 |
34.5% |
Total |
112471 |
123662 |
3.2% |
Source: Department of Heavy Industries
Exports of Engineering Goods - Rs. Crore |
|||
Sub-Sectors |
2013-14 |
2016-17 |
CAGR (FY14-FY17) |
Machine Tools |
247 |
360 |
13.4% |
Textile Machinery |
2604 |
2438 |
-2.2% |
Earthmoving & Mining Machinery |
6460 |
7849 |
6.7% |
Heavy Electrical Equipment |
29227 |
39280 |
10.4% |
Plastic Machinery |
821 |
810 |
-0.4% |
Process Plant Equipment |
7194 |
9291 |
8.9% |
Dies, Moulds & Press Tools |
2694 |
1700 |
-14.2% |
Printing Machinery |
1421 |
1332 |
-2.1% |
Metallurgical Machinery |
1137 |
1358 |
6.1% |
Food processing machinery |
2050 |
9165 |
64.7% |
Total |
53855 |
73583 |
11.0% |
Source: Department of Heavy Industries
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$17.68 billion during April to June 2018 period. This was nearly 4.5% of the total FDI inflows in the country.
Outlook
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 petrochemicals 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.
Europe
Companies selling electrical and electronic goods in the 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.
For further details on regulations applicable in various geographies, refer to this link: http://www.standardsmap.org/identify
China
China: “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 or selling products in China. Several electronics products require CCC mark.
For further details on regulations applicable in various geographies, refer to this link: http://www.standardsmap.org/identify
South Korea
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.
For further details on regulations applicable in various geographies, refer to this link: http://www.standardsmap.org/identify
North America
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
For further details on Regulations applicable in various geographies, refer to this link: http://www.standardsmap.org/identify