What are the Industrial sectors?

Engineering industry

Over the past few years, the Indian engineering industry has grown significantly thanks to increased investments in infrastructure and industrial production. The engineering sector is crucial to India’s economy since it is intimately related to the industrial and infrastructure industries.

India has made considerable progress in developing its engineering sector as it strives to become a worldwide giant. The Engineering Export Promotion Council (EEPC) is the main organization in charge of promoting engineering commodities, products, and services from India, according to the Indian government. India exports transportation equipment, fasteners, castings, forgings, and other machinery and equipment to several foreign markets.

The Washington Accord (WA) welcomed India as a permanent member in June 2014. The country has joined a small club of 17 other countries as a permanent signatory of the WA, a distinguished international agreement on engineering studies and the movement of engineers.

Market size

By FY17, it is anticipated that India’s capital goods and engineering turnover will be US$ 125.4 billion.

Engineering exports from India reached US$ 70.7 billion in FY 2014–15, up 14.6 percent from the prior fiscal year due to rising demand in important countries including the US and the UAE. In addition to these established markets, those in Eastern and Central European nations like Poland also have great promise.

Over 60% of all exports from India are engineering goods, the majority of which are sent to the US and Europe. Recently, India’s engineering exports to Japan and. Shipments to South Korea have also grown, increasing by 16 and 60 percent, respectively.


Due to its comparative advantage in terms of manufacturing costs, technology, and innovation, India’s engineering business is extremely attractive to foreign companies. The aforementioned, along with welcoming regulatory frameworks and expansion in the manufacturing industry, has made it possible for several international investors in India.

According to information provided by the Department of Industries Policy and Promotion (DIPP), the amount of foreign direct investment (FDI) that entered India’s various mechanical and engineering industries between April 2000 and June 2015 was close to US$4,053.72 million.

There have been numerous significant investments and developments in the Indian engineering and design business recently, including:

  • The Kuwait National Petroleum Company (KNPC) has awarded a US$ 1.57 billion contract to Essar Projects, the engineering, procurement, and construction (EPC) division of the Essar Group, for the establishment of a portion of the Al-Zour Refinery Project in Kuwait.
  • India’s engineering and construction major, Punj Lloyd, won an order worth Rs 477 crore (US$ 71.87 million) for the Ennore LNG tankage project from Mitsubishi Heavy Industries of Japan.
  • A contract for engineering support services, such as the delivery of components and airframe maintenance, was signed by Vistara, the joint venture between Tata Sons and Singapore Airlines.
  • Leading online retailer Snapdeal is putting more of an emphasis on mobile commerce and will shortly double the number of engineers on staff to 700 as it expects over 90% of its business to come from this platform over the next three years. As a result of the significant increase in traffic on this platform up to last year, the company moved half of its 350 engineers from PC to mobile commerce.
  • Tata and Honeywell Turbo Technologies collaborated to create the world’s first petrol turbocharged engine. According to a Honeywell statement, the new Tata Revotron 1.2T engine introduced in the 2014 Tata Zest offers enhanced power and torque as well as a multi-drive mode. To meet the unique requirements of a local customer, Honeywell’s engineering teams in Pune and Bangalore drew on regional resources and international expertise in petrol turbo technology.
  • As the company sees larger deals in a market that is widely anticipated to be the next major source of growth for the Indian IT sector, the engineering and R&D division of HCL Technologies will probably surpass the US$ 1 billion mark in the upcoming fiscal year. HCL Tech’s engineering services unit contributed about 17 percent to the company’s revenue in the September quarter, coming in at US$ 245 million.
  • Sadara Chemical Company, a Saudi Arabian company, gave Rolta an additional scope of work to develop a thorough engineering information system within Sadara’s Jubail integrated chemical complex.
  • Dangote Group is building a 20 million tonnes (MT) refinery and polypropylene factory in Nigeria, and Engineers India Ltd (EIL) signed a US$ 139 million consulting agreement with the company.
  • Reliance Infrastructure acquired India’s largest shipbuilding and heavy industries company Pipavav Defence and Offshore Engineering Company Limited, whose infrastructure will facilitate Reliance Infrastructure to build submarines and aircraft carriers on the back of a technological alliance with Swedish defense company SAAB.
  • The acquisition of Harris Performance Products Ltd., a design and engineering firm based in the UK, by Royal Enfield, a two-wheeler division of Eicher Motors, will enable the company to establish supremacy in the world’s mid-sized motorcycle market.
  • Tractebel Engineering (India) acquired Cethar Consulting Engineers Ltd. (CCE), a reputable and esteemed engineering consulting firm. With this acquisition, Tractebel Engineering gains significant market share in India’s thermal power industry and significantly expands its range of services, which also encompasses the gas pipeline, liquefied natural gas, and hydropower sectors.
  • Through its German subsidiary CDP Bharat Forge GmbH, Bharat Forge purchased Mecanique Generate Langroise (MGL), a French oil and gas machining firm. Precision machining know-how and other high-value processes like cladding, which have crucial uses in the oil and gas industry, will be useful to Bharat Forge.
  • Leading airplane manufacturer Airbus said that it has started getting parts for practically all of its aircraft from India and that it plans to source a total of US$ 2 billion from India by 2020.
  • In addition to jobs in the power transmission and distribution sector worth Rs 517 crore (US$ 77.9 million) and a rural electrification project under the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) scheme at Gorakhpur in Uttar Pradesh, Larsen & Toubro also received construction orders totaling Rs 1,099 crore (US$ 165.6 million).

Chemical Industry

With a contribution to the GDP of 2.11 percent, India’s chemical sector is a significant part of the country’s economy. The Indian chemical industry is the third-largest producer in Asia and the sixth-largest in the world in terms of output volume.

In 2014, the Indian chemical industry produced revenue of US$ 118 billion. Agrochemicals make up 20.3% of the Indian chemical sector, followed by specialty chemicals (19.5%) and bulk chemicals, which make up 39%. The remaining portion was accounted for by pharmaceuticals and biotechnology.

India’s growing per capita consumption and demand for agriculture-related chemicals offer a huge scope of growth for the sector in the future. Foreign businesses have increased their presence in India after being attracted by the size and profitability of the Indian market. The entire amount of foreign direct investment (FDI) that entered the Indian chemicals sector from April 2000 to May 2015 (excluding fertilizers) was $10.49 billion.

The Government of India has been supportive of the sector. In the Indian chemicals industry, 100 percent FDI is allowed, although most chemical product manufacture is no longer regulated. Additionally, the government has promoted R&D (Research and Development) in the industry. Additionally, the government is gradually reducing the list of chemicals that are only permitted for small-scale production, allowing for more investment in modernization and technological advancement.

Textile Industry

India’s textile industry is one of the oldest in the country and has existed for a long time. Even now, the textile industry makes up over 11% of all Indian exports, making it one of the major exporters. One of the main employers and one with a high labor intensity is the textile sector. According to The Cotton Textiles Export Promotion Council (Texprocil), the industry generated export revenues totaling US$ 41.4 billion in 2014–15, a growth of 5.4 percent. Two significant segments make up the textile industry. First, the handloom, handicraft, and sericulture industries, which are run on a small scale and use conventional techniques and methods, are included in the unorganized sector. The second is the organized sector, which includes the spinning, clothing, and garments segments and uses contemporary equipment and methods including economies of scale.

The hand-spun and hand-woven textiles sectors are at one end of the textile industry’s extreme diversity, while the capital-intensive sophisticated mill industries are at the other. The main segment of the textiles industry is the decentralized power looms/hosiery and knitting sector. When compared to other countries’ textile industries, India’s textile sector is unique due to its close ties to agriculture (for raw materials like cotton) and its ancient textile-related culture and traditions. Approximately 5% of India’s GDP and 14% of the country’s total Index of Industrial Production (IIP) are attributed to the country’s textile industry.

Market Size

By 2021, it is anticipated that the Indian textiles industry, currently valued at about 108 billion dollars, will have grown to 223 billion dollars. After agriculture, the sector employs more than 45 million people directly and another 60 million indirectly. Approximately 5% of India’s GDP and 14% of the country’s total Index of Industrial Production (IIP) are attributed to the country’s textile industry.

Research by Wazir Advisors and PCI Xylenes & Polyester estimates that the Indian textile industry has a $500 billion potential market. With the development, domestic sales might increase from their current level of 68 billion to 315 billion dollars. At the same time, exports are forecast to rise from their current level of around US$ 41 billion to US$ 185 billion.

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