Engineering Opportunities

An Expert's View about Machinery and Robotics in India

Last updated: 19 Jul 2011

Indian manufacturing sector currently shows a strong upturn. The sector accounts of 30 per cent of domestic investments, 63 per cent of foreign collaborations and 26 per cent of Indian exports. The share of the engineering sector in India’s exports is growing fast and expected to record a CAGR of 30 per cent in the next five years.

Sector briefing Engineering Opportunities in India Why India? India sustained its position as one of the fastest growing economies in the world by achieving an 8.5 per cent growth in GDP in 20010-11. India is also one of the largest economies in the world, having joined the trillion dollar economies in 2007. The Government of India expects the Indian economy to grow at 9% per year in during 2012-17. Indian manufacturing sector currently shows a strong upturn. The sector accounts of 30 per cent of domestic investments, 63 per cent of foreign collaborations and 26 per cent of Indian exports. The share of the engineering sector in India?s economy, business culture, potential India?s exports is growing fast and expected to opportunities and an introduction to other record a CAGR of 30 per cent in the next five relevant issue. years. India?s growth has been fuelled by accelerating internal consumption led demand coupled with ?The large and diverse Indian large investments by domestic and manufacturing sector offers a international majors. The large and diverse very interesting mix of Indian manufacturing sector offers a very opportunities to overseas interesting mix of opportunities to overseas companies. companies? Find general information on the Indian market conditions on UKTI?s website. The Doing Business Guide for India gives an overview of UK Trade & Investment Sector briefing: Engineering opportunities in India Most of the domestic end user industries are Opportunities offering strong demand for engineering products. Aside traditional user industries, such The Indian engineering sector offers as automotive, heavy engineering, opportunities ranging from export of raw construction, power, chemicals, consumer materials, machinery and equipment to durables and aerospace sectors, there are technological collaboration, and R&D to some new opportunities from emerging sectors licensed manufacturing and joint ventures. such as nuclear power, defence and security. The growth of the engineering sector has a Some details of the market size, growth strong correlation with the GDP growth and prospects and main opportunities in some of given the positive growth trajectory for the key engineering sub-sectors in India are given Indian economy, the engineering sector is below: poised for a sustained strong upturn. Indian industry recorded a growth of gross fixed Mining capital of 8.5 per cent in 2010-11, and the engineering industry accounts for a major part With hard coal reserves of around 246 billion of this growth. tonnes, of which 92 billion tonnes are proven, India has a large coal mining industry and is The sector has the dual advantage of having the third largest producer of hard coal in the access to large domestic market and very large world with an annual production of about 500 reserves of natural resources and raw million tonnes. Coal plays a key role in India?s materials such as coal, iron ore and bauxite. energy mix. It meets about 60 per cent of the The low cost structure makes domestic players country's total commercial primary energy cost competitive in the international market demand. and offers huge cost arbitrage to foreign investors. Some of the mining equipment currently being imported into India are underground mining Moreover, India has the unique demographic equipment such as longwall, continuous mining advantage of having one of the largest pools of systems and shearers, and open cast mining working age population (projected to grow to equipment such as dumpers, rope shovels, 800 millions in 2015). While India is already hydraulic excavators and loaders. There are producing large number of engineering also opportunities for export of equipment such graduates, post-graduates and PhDs every as mine safety products, coal handling plants, year, the growing number of engineering coal quality monitoring system, pollution colleges and emphasis on technical and control and environment management vocational education will help India secure equipment to the Indian market. even larger skilled workforce in the coming years. Following the nationalisation of coal mines in India during 1971-73, the industry has been Studies conducted by Confederation of Indian dominated by public sectors bodies, Coal India Industries (CII) and ASCON revealed that Limited (CIL) (www.coalindia.nic.in) and The about 50 segments in the manufacturing sector Singareni Collieries Company Limited (SCCL) grew by 39 per cent, entering the 'excellent (www.scclmines.com). growth' category, during April-December 2010- 11. These sectors include air conditioners, Aside the coal sector, there are opportunities natural gas, tractors, nitrogen fertilisers, ball to supply equipment and mineral beneficiation bearings, electrical and cable wires, auto equipment (crushers, screens and washing components, construction equipment, electric equipment) to the iron ore and bauxite mining fans and tyre industry. industries. While National Mining Development Corporation (NMDC) (www.nmdc.co.in) has As per UNIDO's report titled 'Yearbook of large plans to increase the iron ore production Industrial Statistics 2010', India surpassed and also set up ore beneficiation and iron Canada, Brazil and Mexico as one of the top 10 nugget plants, Steel Authority of India Limited countries in Industrial production. (www.sail.co.in), India?s largest steel producer UK Trade & Investment Sector briefing: Engineering opportunities in India plans to double its iron ore production from the Major aluminium players are Hindalco current level of 20 million tonnes. Industries (www.hindalco.com) and National Aluminium Industries Limited Metals and Advanced Materials (www.nalcoindia.com). There is a growing demand for special metals With an annual production of about 45 million and alloys, and advanced materials such as tonnes, India is the fifth largest steel producer composites, high-end plastics, engineering in the world. ceramics, and nanotechnology based materials In the steel sector, with a number of greenfield and coatings from India?s growing aerospace, projects and brownfield expansions coming up, automotive, nuclear power, space and medical there will be opportunities for supply of devices industries. There are opportunities for equipment and technology in all areas of the direct export of these materials to end users steel value chain: iron ore mining, mineral and also for technology transfers to Indian processing and beneficiation, blast furnace ? materials companies. design, capacity enhancements and retrofitting, steel making and continuous There are also large opportunities for exports casting (slab/billet) facilities, and other hot and and technology transfers in the areas of heavy cold rolling operations. and specialised forgings, casting and metal joining technologies. Aside core iron and steel making technologies, there is an increasing demand for advanced Machine Tools & Manufacturing process control and automation systems, Technologies energy optimising processes, high quality refractory materials, and environment The Indian Machine Tool Sector is displaying a management technologies. strong upturn, fuelled mainly by a buoyant On the raw material side, there is a growing economy, strong domestic demand from the demand for low ash metallurgical coal (as India manufacturing sector, especially engineering, does not have adequate metallurgical coal aerospace and automotive industries, and an reserves) and various grades of steel scrap increasing export potential. such as HMS1 & 2 and shredded scarp (mostly for secondary steel producers). Both the metal forming and cutting segment look attractive. With growing needs from the India will continue to import large quantities of end user industries, India needs large specialised finished steel products e.g. razor quantities of sophisticated metal cutting and blade strips, high-tensile and special alloy steel forming tools. rolled sections and plates, tool steels, cold- rolled grain-oriented and non-grain oriented The Indian machine tool industry currently (CRGO/CRNO) steels, high-pressure seamless- comprises of about 450 manufacturing units. steel pipes for oil and gas industries, and The Indian machine tool industry can be corrosion-resistant steel sections for off-shore classified into organized and unorganized drilling rigs. sector. The organized sector accounts for 33 Major companies in the steel sector are Steel per cent of the industry. Ten major Indian Authority of India Limited (www.sail.co.in), companies account for 70 per cent of the total Tata Steel Limited (www.tatasteel.com), JSW production. Government owned Hindustan Limited (www.jsw.in), Rashtriya Ispat Limited Machine Tools Ltd (HMT) (www.hmtindia.com) (www.vizagsteel.com) and Jindal Steel & Power manufactures 32 per cent of the total quantity Limited (www.jindalsteelpower.com). manufactured in India. In the aluminium sector, major opportunities The large organised players cater to the India?s exist in the areas of mining (equipment), heavy and medium industries, the small-scale smelting and refining operations (furnace sector cater to ancillary units. India is host to technologies, refractory materials and the prestigious annual IMTEX trade fair instrumentation & process control), and power organized by Indian Machine Tool plant operations (coal mining and washing, Manufacturers' Association (IMTMA) every retrofitting of boilers and turbines, ash year. It is the largest metal-cutting machine handling and utilisation). UK Trade & Investment Sector briefing: Engineering opportunities in India tools and manufacturing solutions in South and South-East Asia. While major systems in demand include SCADA, PLC, and DCS systems, there is The Machine tools industry in India has 150 demand for a wide range of automation organised players however 70 per cent of the products and solutions. output comes from the top ten manufacturers. Increasing competition among top players and In the area of Robotics, all global majors such the entry of global majors like Siemens, ABB as Fanuc, ABB and Kuka are present in India. has led to the overall improvement in the The market for robotics products is estimated capabilities and performance. at £500 million. Automotive companies such as Tata Motors, Volkswagen and Maruti Suzuki are CNC & Conventional machine tools the main users and this segment accounts for more than 70 per cent of the market. Main CNC machine tools comprised bulk of the application areas are spot and arc welding in manufacture from the Indian stable. This assembly lines, material handling, and press segment clocked a growth of 32 per cent over and paint shops. Other industries such as the last few years. The CNC turning centres, defence, nuclear power, food, and healthcare together with machining centres and CNC also offer some opportunities. India is expected grinding centres have seen the maximum to grow by 2-2.5 times of the global average. growth in the last 5 years. Conventional The number of installations of robotic systems machine tools manufacturers also registered a is going to be double in the next three years. high growth of 38 per cent. Power/Nuclear Power Equipment Export Trend: India needs huge power to sustain the current The focus of Indian manufacturers to widen its growth trend in the manufacturing sector. potential to other markets resulted in tapping Large investments are planned in the power new opportunities overseas. Indian sector to add more than 80,000 MW in the next manufacturers are exporting to 36 countries 5-7 years. including Canada, Italy, Germany and US. Some of the export orders included machining The power equipment industry with a capacity centres, electro discharge machines and of only 10,000 MWeq is planning large presses. Majority of Indian Machine tool expansion and looking for technology tie-ups to producers has ISO certification and enhance the capacity of manufacture of power manufacturers also have CE Certification to plant equipment to 43,000 MWeq. Due to cater to the European markets. inadequate domestic capacity, the power industry is expected to import more than 50 Import Trend: per cent of the total 92,717 MW of current power equipment orders. The Indian machine tools industry is capacity constrained henceforth creating a huge India has a large civil nuclear power opportunity for importers. The major imports programme. Currently, India has installed comprised of metal cutting machine tools which capacity of 4,120 MW of nuclear power (17 has witnessed a 22 per cent overall growth reactors, 6 plants) and plans to add 30,000 from the previous years. Machining centres, MW by 2020, and another 30,000 MW by 2030. turning centres and grinding centres also The programme is led by the state-own, featured in the list of imports. Nuclear Power Corporation of India (www.npcil.nic.in). There will be wide range of Automation and Robotics opportunities for supply of various equipment, instrumentation, precision components, With emphasis on increasing productivity and cryogenic products, nuclear fuel and waste adopting world-class manufacturing practices, handling system and advanced materials and Indian engineering industry is investing heavily non-destructive testing technologies. in the latest automation, process control and robotics products. The segment is growing at India is also witnessing an increased interest in 18 per cent per annum. supercritical and ultra-supercritical power UK Trade & Investment Sector briefing: Engineering opportunities in India projects. The country?s first 700 MW supercritical project EPC tender was invited in September 2010. More projects are likely to follow in the next two financial years. Defence With sharp rise in capital outlay in defence, the sector offers a growing mix of export and technology partnership opportunities to foreign engineering companies. India accounts for an estimated 2.5 per cent of global defence expenditure, and its current budget allocation of $32 billion is likely to rise to $42 billion by 2015. The sector is witnessing entry of a large number of private sector companies, who are keen to upgrade and modernise their technologies, and enter into technology/manufacturing partnership with foreign companies. If you have any questions on the opportunities above, contact the UKTI contacts named in this report. Business opportunities aimed specifically at UK companies are added daily to UKTI?s website. These leads are sourced by our staff overseas in British Embassies, High Commissions and Consulates, across all sectors and in over 100 markets. You can be alerted to business opportunities on a regular basis by registering on the UKTI website. Find out more on UKTI?s business opportunities service on the UKTI website. UK Trade & Investment Sector briefing: Engineering opportunities in India Major events and activities UKTI contacts Sudipto Sen Advanced Engineering Roadshows in the Senior Trade & Investment Adviser UK: Manufacturing Growth Through British Deputy High Commission Exports 2011 Tel: +91 33 2288 5172-76 Contact: UKTI Advanced Engineering Sector Email: Sudipto.Sen@fco.gov.uk Group www.ukti.gov.uk Email: Janet.tingle@ukti.gsi.gov.uk Time: 12 July 2011 (Manchester) 13 July 2011 Abhirup Dasgupta (Birmingham) and 14 July 2011 (London) [ Trade & Investment Adviser Details available at British Deputy High Commission www.eef.org.uk/export2011 Tel: +91 33 2288 5172-76 Email: Abhirup.Dasgupta@fco.gov.uk Outward Mission from the UK to India: www.ukti.gov.uk Sustainable Manufacturing Contact: UKTI Advanced Engineering Sector Group Email: Janet.tingle@ukti.gsi.gov.uk Time: Early February 2012 Advanced Engineering Technology Partnering Event in India Contact: UKTI Advanced Engineering Sector Group Email: Janet.tingle@ukti.gsi.gov.uk Time: Early November 2011-12 Find full details of all events in this country and sector on the UKTI website. New export events are added daily to the site and you can register to be alerted to them on a daily, weekly or monthly basis UKTI?s Tradeshow Access Programme (TAP) provides grant support for eligible Small & Medium Sized Enterprises (SME's) to attend trade shows overseas. Find out more about UKTI support for attendance at overseas events UK Trade & Investment Sector briefing: Engineering opportunities in India Next steps - How UKTI can help ? Arranging appointments British companies wishing to develop their ? Organise seminars or other events for business in the Indian market are advised to you to meet contacts and promote your undertake as much market research and company in the Indian market planning as possible in the UK. UKTI?s team in India with its wide local knowledge and This work is available via our Overseas Market experience can provide a range of services to Introduction Service (OMIS) a chargeable British-based companies wishing to grow their service which assists British-based companies business in global markets. wishing to enter or expand their business in overseas markets. This can include: ? Provision of market information To find out more about commissioning this ? Validated lists of agents/distributors work, or accessing other UKTI services and ? Key market players or potential specialist advice, please visit the UKTI website customers in the Indian market to find contact details for your local UKTI ? Establishment of interest of such office. contacts in working with you Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2011 by UK Trade & Investment. Crown Copyright © You may reuse this information (not including logos, images and case studies) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit www.nationalarchives.gov.uk/doc/open-government- licence/ or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk This publication is also available from our website at www.ukti.gov.uk or for more information please telephone +44 (0)20 7215 8000. UK Trade & Investment Sector briefing: Engineering opportunities in India
Posted: 19 July 2011, last updated 19 July 2011

See more from Machinery and Robotics in India

Expert Views    
Trends In India's High Technology Trade   By Sanjib Pohit, NISTADS (CSIR)
Cold Chain Industry   By U.S. Commercial Service
Hand Tools   By Indranil Biswas, CSIR-CGCRI
Engineering Opportunities   By UK Trade & Investment
Latest News    
Procurement of Sugarcane Harvesters in Maharashtra   By Foreign Agricultural Service