Indian engineering industry is a major contributor to the country’s economy. The engineering sector in India comprises basic industries such as Metal, Steel, Electrical Machinery, Non-Electrical Machinery and Transport Equipments. Manufacturers, exporters and suppliers of engineering machinery and equipment largely produce industrial machines, rolling mills machinery, plant machinery, plastic moulding machines, construction machines and equipment, railway products, die casting equipment and other special purpose machines.The engineering goods sector consisting mainly of intermediate and capital goods which have fared better during 2006. The IIP data for the month of April- January 2007 shows that intermediate and capital goods sectors have recorded a 16.8% and 11.4% increase over the same period last year. There is an export growth of 15 per cent in 2008-09 to nearly $38.8 billion, against the 27.4 per cent rise ($33.72 billion) seen in the previous year. Between 2003-04 and 2007-08, the sector witnessed a compounded annual growth rate of 33.84 per cent in exports.The US and Europe account for about 30 to 40 per cent of our total exports.

The engineering industry comprises of both heavy and light engineering sectors. The heavy engineering market contributes to about 80% of the net engineering production. The segments in these sub sectors are diverse including power equipment manufacturer, electrical and non-electrical manufacturer, and static equipment manufacturer. The industry is less fragmented at the top but highly fragmented at the bottom. The export growth of the engineering goods at 37.9% which was the fastest in the manufacturing segment. The segments which contributed to this were machinery and instruments, iron and steel, and other engineering items.

Another focus of the industry is the engineering process outsourcing (EPO) services from India. India is a favorite destination of big automotive and aerospace companies like Ford, and General Motors. The EPO market is expected to cross US$ 40 billion by 2020, which will increase the global market share of India to 32% from the current 12% in the same segment. Demand in the engineering industry segment is driven by investments and capacity creation in core sectors like power, infrastructure developments, mining, oil and other sectors like the general manufacturing sector, automotive and process industries, and consumer goods industry. The thrust given by the government on infrastructure development, the capacity addition done by the steel, power, refineries, and chemicals all provide further fillip to the engineering industry segment.

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