Department of Heavy Industry Ministry of Heavy Industries & Public ...

Recommendations for 12 th Five Year Plan for Capital Goods & Engineering Sector 19
2. Overall Assessment of Capital Goods & Engineering Sector
Industrial, Investment, Foreign Collaboration and Trade Policy in respect of
Capital Goods & Engineering Sector
As the capital goods & engineering sector falls under delicensed category; no
industrial license is required. Industrial Entrepreneur Memoranda (IEM) is
required to be filed to undertake the manufacturing activity.
FDI up to 100% permitted on automatic route (through RBI).
Quantum of payment for technology transfer, design & drawing, royalty etc.
to the foreign collaborator has no limit
Import and export of capital goods & engineering items including import of
second hand capital goods is allowed freely.
Capital goods & engineering sector is large in India with demand at ~ Rs 311,550
Cr, growing at a CAGR of over 14.12%. Heavy electrical and power equipment
sector is the largest sector with a size of Rs 121,418 Cr, closely followed by
Engineering Goods with size of Rs 116,449 Cr as of year 2010-11.
Capital Goods and Engineering Market from 2005-2006 to 2010-11 (Rs Cr)
Indian Market Size (Rs Cr)
Sub-sector
300000
+15%
260682 Machine Tool
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
234163
4877 7162 8698 8319 7245 10236 16%
218450
Plastic Machinery
200,000
189725
925 1148 1466 2233 2332 3850 30.60%
155138
Earthmoving &
127330
Mining Machinery 6700 9199 13800 10400 13850 14500 16.70%
Heavy Electrical
15.50%
100,000
58941 68106 82309 89041 104185 121418
Metallurgical
Machinery 1386 2181 2423 4172 3800 4992 29.30%
Textile Machinery
0
9090 12212 10770 7867 8020 10500 2.90%
Process Plant
11.90%
2005 2006 2007 2008 2009 2010
Equipment 9329 10480 13142 13365 14628 16345
Engineering Goods
14.90%
Heavy Electrical Equipment Textile Machinery
62013 79752 89744 95029 100990 116449
Engineering Goods
Machine Tools
Dies, mould & Press
Earth Moving Equipment
Metallurgical Machinery tools 7,000 8,000 9,190 10,385 11,735 13,225 13.40%
Process and plant equipment
Total
160261 198240 231542 240811 266785 311515 14.12%
Robust growth across most sub-sectors
Note: Figures for process plant equipment have been projected backwards using current level and past CAGR
Source: 1: Figures taken from sub-sector; 2: EIS;
Capital goods & Engineering sector- Recommendations for 12th five year plan 12
Capital goods and Engineering sector provides direct employment to 1.40 million
people (2010).
CAPITAL GOODS AND ENGINEERING SECTOR OCTOBER, 2011