capital goods market
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EXPORT-IMPORT BANK OF INDIA
OCCASIONAL PAPER NO. 124
INDIAN CAPITAL GOODS INDUSTRY -A SECTOR STUDY
EXIM Bank’s Occasional Paper Series is an attempt to disseminate the findings ofresearch studies carried out in the Bank. The results of research studies can interestexporters, policy makers, industrialists, export promotion agencies as well asresearchers. However, views expressed do not necessarily reflect those of the Bank.While reasonable care has been taken to ensure authenticity of information and data,EXIM Bank accepts no responsibility for authenticity, accuracy or completeness of suchitems.
© Export-Import Bank of IndiaPublished by Quest Publications
June 2008
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CONTENTS
Page No.
List of Tables 5
List of Exhibits 9
List of Boxes 9
Executive Summary 11
1. Introduction 282. Global Scenario 30
3. Capital Goods Industry in India 38
4. Exim Bank’s Support to Indian Machine tools Sector: 61Case Study
5. Indian Capital Goods Industry: Market Analysis and 65Export Potential
6. Challenges and Strategies 107
Annexure
1. List of Capital Goods Items Covered in Index of 116Industrial Production
2. Shipment of Textile Machinery: Various Segments 117
3. India’s Export, Import, and Export-Import Ratio of 118Select Machine Tools
4. India’s Export, Import, and Export-Import Ratio of 119Select Textile Machinery
5. India’s Export, Import, and Export-Import Ratio of 120Select Construction and Mining Machinery
6. India’s Export, Import, and Export-Import Ratio of 121
Select Process Plant Machinery
7. India’s Export, Import, and Export-Import Ratio of 121Select Electrical Machinery
3
Project Team:
Mr. S. Prahalathan, General Manager, Research and Planning Group
Ms. Renuka Vijay, Manager, Research and Planning Group
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List of Tables
Table Title Pg. No.No.
1. World Production of Machine Tools –2007 332. World Consumption of Machine Tools 33
3. World Export of Machine Tools 34
4. World Import of Machine Tools 35
5. FDI Inflows in Select Capital Goods Sector in India 40
6. Production of Machine Tools in India 42
7. Export of Machine Tools from India 42
8. Trends in Production of Textile Machinery in India 44
9. Indian Construction and Mining Machinery: Industry Size 47
10. Market Size and Leading Players: Select Segments of 48Construction and Mining Machinery (2006-07)
11. Export Performance of Select Construction and Mining 48Machinery (2006-07)
12. Market Size and Leading Players in Process Plants, 50Machinery and Equipments
13. Export of Select Process Plant Equipments / 51Machinery from India (2006-07)
14. Market Size and Leading Players in Transformer Industry 52
15. India’s Export of Electric Transformers, Static Converters 53
and Inductors - HS Code 8504 (2006-07)16. India’s Import of Electric Transformers, Static Converters and 54Inductors - HS Code 8504 (2006-07)
17. Market Size and Leading Players in Switchgear Industry 55
18. India’s Export of Switching and Protecting Electrical Circuits / 55Apparatus in (2006-07)
19. India’s Import of Switching and Protecting Electrical Circuits / 56Apparatus (2006-07)
20. Market Size and Leading Players in Electric Capacitor Industry 57
21. India’s Export of Electric Capacitors (2006-07) 57
22. India’s Import of Electric Capacitors (2006-07) 5823. Market Size and Leading Players in Motors and Generators 59
24. India’s Export of Electric Motors and Generators (2006-07) 59
25. India’s Import of Electric Motors and Generators (2006-07) 60
26. World Import of Select Machine Tools 66
27. Market Analysis for Machine Tools Under HS Code 8462 67
28. Market Analysis for Machine Tools Under HS Code 8467 68
29. Market Analysis for Machine Tools Under HS Code 8457 69
30. Market Analysis for Machine Tools Under HS Code 8465 70
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31. Market Analysis for Machine Tools Under HS Code 8458 71
32. Market Analysis for Machine Tools Under HS Code 8460 7233. Market Analysis for Machine Tools Under HS Code 8464 73
34. Market Analysis for Machine Tools Under HS Code 8459 74
35. Market Analysis for Machine Tools Under HS Code 8461 74
36. World Import of Select Textile Machinery 75
37. Market Analysis for Textile Machinery Under HS Code 8450 76
38. Market Analysis for Textile Machinery Under HS Code 8451 77
39. Market Analysis for Textile Machinery Under HS Code 8448 78
40. Market Analysis for Textile Machinery Under HS Code 8445 79
41. Market Analysis for Textile Machinery Under HS Code 8447 7942. Market Analysis for Textile Machinery Under HS Code 8446 80
43. World Import of Select Construction and Mining Machinery 81
44. Market Analysis for Construction and Mining Machinery 82Under HS Code 8429
45. Market Analysis for Construction and Mining Machinery 82Under HS Code 8428
46. Market Analysis for Construction and Mining Machinery 83Under HS Code 8427
47. Market Analysis for Construction and Mining Machinery 84
Under HS Code 842648. Market Analysis for Construction and Mining Machinery 85
Under HS Code 8430
49. Market Analysis for Construction and Mining Machinery 85Under HS Code 8425
50. World Import of Select Process Plant Machinery 87
51. Market Analysis for Process Plant Machinery 88Under HS Code 8421
52. Market Analysis for Process Plant Machinery 89Under HS Code 8418
53. Market Analysis for Process Plant Machinery 90Under HS Code 8419
54. Market Analysis for Process Plant Machinery 90Under HS Code 8438
55. Market Analysis for Process Plant Machinery 91Under HS Code 8403
56. Market Analysis for Process Plant Machinery 92Under HS Code 8455
Table Title Pg. No.No.
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Table Title Pg. No.No.
57. Market Analysis for Process Plant Machinery 93
Under HS Code 8417
58. Market Analysis for Process Plant Machinery 93Under HS Code 8402
59. Market Analysis for Process Plant Machinery 94Under HS Code 8454
60. Market Analysis for Process Plant Machinery 95Under HS Code 8416
61. Market Analysis for Process Plant Machinery 96Under HS Code 8420
62. Market Analysis for Process Plant Machinery 97Under HS Code 8404
63. Market Analysis for Process Plant Machinery 98Under HS Code 8410
64. Market Analysis for Process Plant Machinery 98Under HS Code 8435
65. World Import of Select Electrical Machinery 99
66. Market Analysis for Transformers Under HS Code 8504 100
67. Market Analysis for Switchgears / Control gears 101(exceeding 1000v) Under HS Code 8535
68. Market Analysis for Switchgears / Control gears (below 1000v) 102Under HS Code 8536
69. Market Analysis for Electric Capacitors Under HS Code 8532 103
70. Market Analysis for Motors and Generators Under HS Code 8501 103
71. Market Analysis for Electric Generating Sets Under HS Code 8502 104
72. Trends in Licenses Issued under EPCG Scheme 108
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List of Exhibits
No. Title Pg. No.
1. Leading Producers of Electrical Machinery and Apparatus (ISIC 31) 30
2. Leading Producers of Other Machinery and Equipments (ISIC 29) 31
3. Revenue Generation and Growth in Global Capital Goods Industry 32
4. Global Construction and Mining Machinery Industry: 36Value & Growth
5. Global Market for Industrial Machinery 37
6. Movement of Index of Capital Goods Industry vis-à-vis IIP in India 39
7. Movement in Production Index of Sub-Segments of Capital 39Goods Industry
8. Classification of Indian Machine Tools Sector 40
9. Production and Export Performance of Indian Machine 41Tools Sector
10. Major Export Destinations of Machine Tools from India (2006-07) 43
11. Textile Machinery – Trends in Capacity, Production and Capacity 44Utilization
12. Export and Import of Textile Machinery from India 45
13. Segment wise Import of Textile Machinery in India 45
14. Segment-wise Export of Textile Machinery from India 4615. Structure of the Electric Equipment Industry 52
16. Production and Export Performance of Indian Machine Tools Sector 63
9
List of Boxes
No. Title Pg. No.
1. Lines of Credit : A Market Entry Mechanism for 112
Capital Goods Industry2. Assessment of Conformity Standards for Machineries 113
in USA and Europe
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INTRODUCTION
Capital goods industry is thebackbone of the manufacturingactivity. A vibrant capital goodsindustry is a pre-requisite to propelthe growth of the manufacturingactivity in any country.
A study commissioned by theGovernment of India1 has definedcapital goods as plant machineriesfor agricultural, industrial andcommercial segments of economicactivities that have economic asset
life of over 3 years.Considering the list of items
covered under the head ‘capitalgoods’ in calculation of IIP, this studyhas analysed major segments suchas machine tools, textile machinery,electrical machinery, earthmovingand construction machinery, andprocess plant equipments.
GLOBAL SCENARIO
In value terms, the global capitalgoods industry is estimated to havegenerated total revenue of US $ 4.5trillion in 2006, according to a report
by Datamonitor. The capital goodsindustry has seen fluctuations in itsgrowth rate over the past few yearsand experienced a CAGR of 2.7%during the period 2002-2006. United
States is the major countryaccounting for 31% of the globalmarket value in 2006. Europe as aregion accounted for around 28%,followed by the Asia-Pacific region(27%). Globally, trade in capitalgoods2 was valued at over US $1.5 trillion in 2006. Thus, the capitalgoods trade accounts for 12% in
world merchandise trade and17.5% in world trade inmanufactures. The share of exportsin total world production isestimated to be one-third. Germanyis the largest exporter of capitalgoods in the world accounting for13% of global exports in 2006.China and the USA come next withshares of 12% and 11%,respectively.
According to a study by UnitedNations Industrial DevelopmentOrganisation (UNIDO), Japan is thelargest manufacturer of electrical
EXECUTIVE SUMMARY
1 Department of Industrial Policy and Promotion, Ministry of Commerce andIndustry, Government of India.
2
WTO statistics
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machinery and apparatus (ISICCode 31) in 2005, with a share of55.2%. Other major producers wereUSA (10.0%), China (8.9%),Germany (6.9%) and France (2.6%).India holds a share of 1.7% in globalproduction of electrical machineryand apparatus in 2005. Amongstdeveloping countries, China is thelargest producer with a share of 55%in cumulative production ofdeveloping countries, followed byIndia with a share of 10.2%, and
Brazil (7.2%).In the case of other machinery
and equipments (ISIC 29), whichmainly consisted of general purposemachinery (engines, turbines,pumps, compressors, taps, valves,bearings, gears, ovens, furnaces,lifting and handling equipments) andspecial purpose machinery (such as
agricultural machinery, machinetools, metallurgical machinery,mining / quarrying / constructionmachinery, textile / leathermachinery, and food processingmachinery), USA is the world’sleading producer with a share of19.4% in world production in 2005,followed by Japan (15.6%),Germany (14.9%) and China (7.3%).India is ranked at 15th position inworld production with a share of1.4%. Amongst developingcountries, China is the majorproducer of non-electrical machineryitem (ISIC 29) with a share of 33.8%in 2005. India is fourth largestmanufacturer with a share of 6.7%
in the total production of developingcountries.
Machine Tools
The total production of machinetools by the top 29 global producerswas more than US $ 70 billion in2007, experiencing a growth of18% over the previous year. Japanis the largest producer of machinetools accounting for 20% of theworld production. Other majorproducers are Germany (18%),
China (14%), Italy (10%), Korea(6.5%) and Taiwan (6%).
In terms of consumption ofmachine tools, China tops the listwith total consumption worth nearlyUS $ 13 billion, showing a growth of20% over the previous year. Japanand USA comes next with aconsumption level of more than US$
7 billion and US$ 6 billionrespectively. The consumption levelfor India is around US$ 1 billion, thusbeing the 11th largest consumer ofmachine tools.
World export of machine tools isestimated to be over US $ 40 billionin 2007, a growth of 18% over theprevious year. The export orientationof global machine tool industry thusworks out to over 50% in 2007.Germany is the largest exporter ofmachine tools in the world; exportingmachine tools valued more than US$9 billion in 2007. Germany exportedover 70% of its production in 2007.Other major exporters include Japan
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(US $ 7.6 billion), Italy (US $ 4.2billion), Taiwan (US $ 3.4 billion) andSwitzerland (US $ 2.5 billion).
As far as the import isconcerned, China leads the world,with an estimated import value of US$ 6.9 billon in 2007. The UnitedStates (US $ 4.4 billion), Germany(US $ 3.7 billion) and Taiwan (US $2.8 billion) are other major importers.Amongst developing countries,Mexico and India are emerging as
major importers of machine tools.
Construction and MiningMachinery
Global construction and miningmachinery industry3 is estimated tohave generated a total revenue ofUS $ 113 billion in 2006. Theindustry had experienced severalyears of decline in growth, sincethe beginning of the decade, butpicked up in recent years. Theindustry experienced a 7% growthin the year 2005, which, however,came down to 4% in 2006. TheCAGR for the industry during theperiod 2002-06 stood at 4.7%.
Construction sector witnessedgrowth both in developed anddeveloping countries during thisperiod. In the developed countries,such as USA and Europe, the growthin construction activity was fuelled byincreased demand for new officespace. In developing countries of
Asia-Pacific and Eastern Europeanregion investment in infrastructureincreased substantially. Increasinggrowth in extractive activities in Africaregion also led the growth in theglobal construction and miningindustry. USA dominates the globalconstruction machinery industry,accounting for almost 39% of theworld market. Asia-pacific (30%) isthe second largest region, followedby Europe (28%).
Industrial MachineryWorld market for industrialmachinery, equipment and suppliesis estimated to be US $ 345 billionin 2006. Asia is the leading marketfor industrial machinery accountingfor around 32% (US $ 109 billion)of world market in 2006. NorthAmerica and Europe are the other
major markets, accounting for 25%share each in the world industrialmachinery market and the industrialmachinery market is expected tocross US $ 500 billion in 2011, aCAGR of 8%.
CAPITAL GOODS INDUSTRYIN INDIA
The capital goods industry is thebackbone of India’s manufacturingsector. India produces wide rangecapital goods, including machineryand machine tools. Some of theprominent capital goods producedin India include heavy electrical
3 Includes construction machinery, farm machinery and heavy trucks.
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machinery, textile machinery,machine tools, earthmoving andconstruction equipment includingmining equipment, roadconstruction equipment, materialhandling equipment, oil & gasexploration equipment, sugarmachinery, food processing andpackaging machinery, railwayequipment, metallurgicalequipment, cement machinery,rubber machinery, process plantsmachinery & equipments, paper &
pulp machinery, printing machinery,dairy machinery, industrialrefrigeration, industrial furnaces etc.Capacity creation in the Indiancapital goods industry has beengrowing, since liberalization, and intune with the growth in industry.Cumulative foreign directinvestments (actual inflows) in thecapital goods industry amounted toover US $ 1.6 billion since January2000.
Non Electrical Machinery
Machine Tools
The machine tools sector is one ofthe important segments of thecapital goods industry in India. The
sector is recognized as a providerof cost-effective high quality lean-manufacturing solutions. The sectormanufactures almost the completerange of metal-cutting and metal-forming machine tools. Customizedin nature, the products from theIndian basket comprise
conventional machine tools as wellas computer numerically controlled(CNC) machines.
Total production of machinetools in the country reached the levelof more than Rs. 2000 crores by theend of the year 2006-07, showing agrowth rate of almost 15%, over theprevious year. Export of machinetools has shown a steady increasein the last few years. In the year2006-07, export of machine tools
was worth more than US $ 234million. During the period April – November 2007, machine toolsexport stood at US $ 199.28 million,an increase of over 27%, over thesame period in the previous year.USA is the largest market formachine tools exports from India. Inthe year 2006-07, USA accounted for19% (US $ 45.25 million) of India’s
total export of machine tools. Othermajor markets include Germany(8.1%), UAE (5%), Singapore(4.7%), and USA (4.6%).
Textile Machinery
Textile is one of India’s majorexport items contributing to over11% in India’s export earnings.
Indian textile machinery sectorstarted as an offshoot of the textileindustry to cater to the capitalexpenditure demand of the textileunits. the Indian textile machinerysector started producing automatedmachines, with innovation,envisaging growth in capacity
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expansion in the textile industry inthe post-quota regime.
Textile machinery production
has shown steady increase in therecent years. The total production oftextile machinery in the countryincreased from around Rs. 11,750million in 2002-03 to more thanRs.30,000 million by 2007-08. Thesuccess of the textile machinerysector depends largely ontechnology and branding.
Considering that many Indian textilemachinery manufacturers havestarted in-house research anddevelopment activities, the sector ispoised for further growth. Recently,leading textile machinerymanufacturers have collectivelyestablished a research anddevelopment centre at the IndianInstitute of Technology, Mumbai.
Construction and Mining
Machinery
India produces a wide range ofconstruction and mining machinery
– such as hydraulic excavators,wheel loaders, backhoe loaders,bull dozers, dump trucks, tippers,graders, pavers, asphalt drum / wet
mix plants, breakers, vibratorycompactors, cranes, fork lifts,dozers, off-highway dumpers (20Tto 170T), drills, scrapers, motorgraders, rope shovels etc. Theyperform a variety of functions likepreparation of ground, excavation,haulage of material, dumping/laying
in specified manner, materialhandling, road construction etc.
Indian construction and mining
machinery sector is also exporting tovarious countries, includingdeveloped countries such as USA,UK, and Singapore. Major items ofexport include moving, grading, pile-extracting machineries.
Process Plant Machinery
The process plant machinery and
components sector in India is aheterogeneous segment of capitalgoods industry. The sector catersto a wide range of processindustries like oil and gas,petroleum refining, petrochemicals,chemicals, fertilizers,pharmaceuticals. metal processing,cement, paper, sugar, and foodprocessing. The sector designs and
manufactures a wide range ofequipment and systems such as:pressure vessels, columns, towers,heat exchangers, multi-tubularreactors, evaporators, crystallizers,dryers, road/rail tankers, storageequipments, equipment for dairyand food processing, mineralbeneficiation equipments, rotary
kilns, equipments for solid-liquidseparation, equipment for waterand waste water treatment.
Few of the Indian companieshave made their mark in the exportarena due to their manufacturing skilland quality. These companies areequipped with modern machinery
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and are producing sophisticatedequipments such as high-pressureheat exchangers, spiral heatexchangers, multi-wall vessels, air-fin coolers, multi-tubular reactors etc.Exports in the last couple of yearshave grown at a CAGR of 36%, whilethe import growth (CAGR) has beenaround 49%.
Electrical Equipments andMachinery
The electrical equipment and
machinery sector comprises arange of products, such astransformers, switchgears, motors,generators and control equipment.Electrical equipment and machineryis principally used in the powerindustry (generation, transmissionand distribution) as well as in othermanufacturing industries, such as
automobiles, cement, steel,petrochemicals and refining.
Transformer Sector
Transformer is a crucial componentin transmission and distribution ofelectricity. The transformer industryis usually divided into distributiontransformers, power transformersand other types of special
transformers for welding, traction,furnace etc.
Besides catering to the domesticdemand, India is exportingtransformers to over 100 countriescovering USA, Europe, Syria,Malaysia, Singapore, Bangladesh,Oman and China. In the year 2006-
07, India’s export of transformersamounted to US $ 645 million, agrowth of 74% over the previousyear.
India is also an importer ofelectric transformers; in the year2006-07, India importedtransformers valued US $ 557million, a growth of 37% over theprevious year. India’s major sourcecountries include China, Germany,USA, Singapore and Japan. Chinaalone accounts for about 40% ofIndia’s total transformer imports.
Switchgear and Control gear
Sector
Switchgears and control gears arerequired for transmission anddistribution of power and arenecessary at every switching pointin power transmission and
distribution system. This sector isfully developed and matured one inIndia, producing and supplying awide range of products catering tothe needs of households,commercial and power sector, forentire voltage ranging from 240 Vto 800 KV. India has been exportingswitchgears and control gears to
various countries. In the year 2006-07, India exported switchingapparatus (not exceeding 1000v)valued at US $ 234 million, agrowth of 28% over the previousyear. In addition, India alsoexported switching apparatus(exceeding 1000v) worth US $ 90million in 2006-07, a growth of 34%
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over the previous year. Majormarkets include UK, USA,Germany, UAE, Philippines,Australia and Hong Kong.
India is also an importer ofswitchgears and control gears. In theyear 2006-07, India importedswitchgears and control gears (notexceeding 1000v) valued US $ 462million in 2006-07. In the same year,the import of switchgears (exceeding1000v) amounted to US $ 51 million.
Capacitors
Capacitors are used for correctingpower factor at the consumer end,to improve the efficiency of thesystem and reducing unwantedloses. LT capacitors, HT capacitors,running capacitors, electrolyticmotor starter capacitors, andinduction furnace capacitors aresome of the capacitorsmanufactured in India. India’sexport of electric capacitorsamounted to US $ 39 million in2006-07, witnessing a growth of56% over the previous year. USAis the major market for Indianelectric capacitors with a share of11.6%, followed by Spain and Qatar
(10% each), Turkey and UAE (6%each).
Motors and Generators
The generator industry has twosegments: portable sets, which runon kerosene, petrol and diesel; andstationary sets, which run primarily
on diesel. Large number of playersare engaged in production ofgenerators, particularly in the lowerKVA generator (3 to 15 KVA)segment. This segment ischaracterized by simple technologyand hence dominated by the smalland medium enterprises (SMEs). Inthe year 2006-07, India’s export ofelectric motors and generators (HSCode 8501) was valued at US $133 million, whereas India’s exportof electric generating sets and
rotary converters (HS Code 8502)amounted to US $ 361 million. USAis the largest market for export ofboth the categories. On the otherhand, India’s import of electricgenerating sets (HS Code 8502)was valued at US $ 114 million, andthe import of electric motors andgenerators (HS Code 8501) wasvalued at US 244 million. China,Germany, USA and South Koreaare major importers under both thecategories.
In sum, the capital goodsindustry in India has witnessedturnaround since last few years. Theindex of industrial production iswitnessing an increasing trend since2002-03. Exports by various sub-segments of the capital goodsindustry is also on the increase,especially with regard to machinetools under the category of non-electrical machinery; andtransformers, switchgears, electricgenerating sets under the electricalmachinery category. India is net
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importer in most of the products, asthe leading players are expandingtheir capacities and the country is onthe manufacturing growth path.
EXIM BANK’S SUPPORT TOINDIAN MACHINE TOOLSSECTOR: CASE STUDY
The economic reforms increasedthe competition to Indian industry,both in domestic and foreignmarkets. This resulted intransformation of Indian
manufacturing sector, which hasbeen increasingly seekingtechnological solutions that helpthem in sharpening theircompetitiveness, both in domesticand international markets. At this
juncture, Export-Import Bank ofIndia (Exim Bank) identified Indianmachine tools sector – a sub-segment of Indian capital goodsindustry and brought out a studyidentifying appropriate strategies tostrengthen this sector and therebyhelp contribute to the growth ofIndian manufacturing sector. Onesuch recommendation made by thestudy was that the Indian MachineTools Manufacturers Association(IMTMA) to adopt a cluster
approach, seeking support fromUnited Nations IndustrialDevelopment Organisation (UNIDO)and the Government of India (thethen Department of Small ScaleIndustries) to help the member-firms in overcoming theweaknesses by adopting bestpractices in the industry across theglobe.
Following this recommendation,at the instance of the industry,National Programme forDevelopment of Indian Machine ToolIndustry (NPDMI) was launched inDecember 2002, as a cooperativeeffort of UNIDO, Government ofIndia, Exim Bank and IMTMA with theaim of strengthing the competitiveposition and technological andmarket development capacity ofplayers, and establishing ‘Made inIndia’ label in machine tools.
A Steering Committee wasformed drawing expertise fromvarious fields to guide successfulimplementation of the project. EximBank’s representation in theCommittee significantly contributedto the successful implementation ofthe programme. Range of activitieswas undertaken to update the
manufacturing and managementpractices of the players in Indianmachine tools sector. Evaluation ofmachine tool technology and markettrends in USA and Europe wasundertaken through surveys. Visit toEMO Milan (a biennial trade show formachine tools held in Italy) helpedthe industry to study the global
technological trends in the machinetools sector, and undertake gapanalysis of technology in Indianmachine tools sector. Learningthrough participation in internationaltrade shows were supplemented withshowcasing the capabilities of Indianmachine tool manufacturers in India.To bridge the technology gap,especially in the small and medium
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segment, a series of advancedmachine tool design courses wereorganized at International Centre forAdvancement of ManufacturingTechnology (ICAMT), Bangalore. Itmay thus be fair to surmise that as aresult of range of such activities, theproduction and export of Indianmachine tools sector have gone upover the years. ‘Made in India’ labelof Indian machine tool sector hasgained international reputationmaking the sector more competitive
in domestic as well as internationalmarkets. UNIDO declared thisinitiative as a success story
Exim Bank has been closelyassociated with the export efforts ofIndian machine tools sector. TheBank has been supporting themachine tool sector to moderniseand upgrade their production
facilities, adaptation of technologyand internationally acceptablestandards through its variousfinancing products and services. TheBank under its export facilitationprogramme, has supported theinitiative of IMTMA in setting up ofthe Bangalore InternationalExhibition Centre (BIEC)
INDIAN CAPITAL GOODSINDUSTRY: MARKETANALYSIS AND EXPORTPOTENTIAL
Globally, the capital goods industryis worth around US $ 4.5 trillion.Germany and USA are traditionally
large suppliers of different sub-segments of capital goods. Of late,Asian countries such as China,Taiwan and South Korea havebecome major players in productionand export of capital goods.Consumption of capital goods hasalso increased substantially indeveloping Asian countries due tothrust given to the value-addedmanufacturing.
Under the machine tools category, though there has beengrowth in exports, in the last threeyears, the import of machine toolshave outgrown in several sub-segments, bringing down the export-import ratio (Annexure - ). Thisindicates that there is significantroom for market expansion in thedomestic market. Market analysesreveal that major developing country
importers of machine tools in theworld include Mexico, Thailand,Turkey, Poland and China. India’smajor developing country marketsfor machine tools have been UAE,Nigeria and Thailand. In addition,India exports machine tools to hostof developing countries of Africa andWest and South Asia, such asKenya, Sudan, Bangladesh, Iran and
Sri Lanka. Though some of the sub-segments of machine tools areexported to leading developingcountry markets, in many cases theshare of India in these markets areinsignificant. Thus, careful targetingof export markets need to beundertaken by the machine tool
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industry for penetration in newmarkets and expansion of marketshare in existing markets.
The technology upgradationfund scheme of Government of Indiahas contributed to the capacityexpansion in the domestic textilesector significantly. Most of suchcapacity expansion has occurredthrough imports. As a result, theexport-import ratio of textile machinery sector has also comedown significantly in the last threeyears (Annexure -), especially in sub-segment, non-woven machinery.Major developing country importersof textile machinery in the worldinclude China, Hong Kong, Turkeyand Pakistan. On the other hand,India’s major developing countrymarkets for textile machinery includeBangladesh, Indonesia and UAE.
There is ample scope for exportingto other developing countries ofSouth Asia, especially to Pakistanand Sri Lanka. In addition, countriessuch as Turkey and Egypt could alsobe targeted for expanding exportsand enhancing market share.
Construction and mining
equipment is another area in which
the export-import share has comedown in the last three years, exceptunder the product group pulley tackleand hoists (HS Code 8425). Thisindicates that there is significantroom for capacity expansion inconstruction and mining equipmentsector also. Amongst developing
countries, China, Mexico andIndonesia are the leading importersin the world. While developedcountries cater to most of the importrequirements of these developingcountries, India could explore theopportunities in these countries.India’s export markets include UAE,Kuwait and Qatar in west Asia andAfrican countries such as Kenya,Tanzania, Togo, Tunisia andMauritius. The share of India in theimport of these countries is not
always significant. Thus, thesecountries could be targeted formarket expansion by theconstruction and mining equipmentcompanies in India.
Analysis of process plant
machinery sub-segment revealedthat in some product groups, exportis greater than imports, and export-
import ratio in most such productgroups has also improved in the lastthree years. However, in manyproduct groups, there has beenreduction in export-import ratio.Major developing country importersinclude China, Mexico, Taiwan,Indonesia and Turkey. ThoughIndia’s exports of process plant
equipments are oriented towardsthese developing countries, thevolume is not consistent with thepotential. India’s major exportmarkets for process plants includeUAE, Saudi Arabia, Nigeria, Kenyaand Vietnam. Except for fewproducts in few countries, India’s
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share is insignificant even in thesemarkets.
Mixed results are also observed
in electrical machinery andequipment sub-segment. While inmost of the product groups theexport-import ratio has increased,reduction has been witnessed inproduct groups such as electricmotors and generators. Majordeveloping country importers in theworld are China, Hong Kong, Taiwanand Mexico. Another interestingtrend in world trade is that there hasbeen significant trade amongst thesecountries, especially China, HongKong and Taiwan trading with eachother. India’s main developingcountry export destinations ofelectrical machinery include UAEand Saudi Arabia. Other developingcountries to which India has been
exporting the electrical equipmentsinclude Qatar, Mali, Nigeria, Syriaand Philippines. However, India’sshare in total import of many of thesecountries is not significant, indicatingthe opportunities for marketexpansion in these countries.
In sum, the analyses show thatthere need to be capacity expansion
in the Indian capital goods industryto cater to the rising demand, bothfrom domestic and export markets.Technological solutions, throughresearch and development, are to beoffered to capture new markets;effective market enhancement andcustomer retention strategies arerequired to sustain and expand in theexisting developing country markets.
CHALLENGES ANDSTRATEGIES
Challenges
Technological Competency
The technologies used forproduction as also in assembly ofIndian capital goods are not alwaysupdated in tune with the globaltechnological trends. While thereare some players who havetechnological competencies,
especially in design capability,application innovation and processinnovation, the technologicalcapabilities of large number ofplayers, especially in the SMEsector, are limited. In addition, thetechnological competencies ofplayers in the SME sector, whoprovide components or
intermediates to original equipmentmanufacturers are also limited.Transfer of technology from otherdeveloped countries has also notbeen significant despiteliberalization of policies fortechnology transfer and foreigndirect investments.
Import of Second Hand Capital Goods
Under the Export Promotion CapitalGoods (EPCG) Scheme, import ofsecond hand capital goods ispermitted in India for pre-production, production and post-production activities. The capitalgoods that may be imported underthis scheme include spares
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(including refurbished/ reconditioned spares), tools, jigs,fixtures, dies and moulds. Import ofcapital goods under this scheme
would attract only 5% customs dutysubject to an export obligation,equivalent to 8 times of duty savedon the capital goods imported. Itmay be mentioned that machinetools, refinery equipments,construction and mining machinery,plastic processing machinery andprinting machinery are some of the
second hand capital goodsimported into India. During theperiod April – December 2007, over14300 EPCG applications havebeen sanctioned with licenses / authorizations, with a CIF dutycredit of nearly Rs. 12,000 crores.While the main objective of thisscheme is to help modernization ofthe industry, by offering duty
concessions, the imported capitalgoods pose stiff competition to theindigenous capital goodsmanufacturers.
Cost Competitiveness
The Indian capital goods industrylargely uses crucial inputs such asiron and steel that are of domestic
origin. Over the years, there hasbeen significant increase in cost ofinputs, but the players in thisindustry are unable to pass on theprice increase to the endconsumers, due to competitionfrom imports.
The capital goods industry also
has high incidence of taxation; a
number of indirect duties (such as
excise duty, octroi, entry tax, sales
tax and service tax) are levied adding
up to the end user cost. This makes
the indigenous supplies costlier vis-
à-vis imported capital goods. Some
estimates have put the cost
disadvantage, due to such levies to,
an extent of over 20%.
Delivery Schedules
It may be mentioned that most of
the capital goods are not supplied
off-the-shelves and are custom-
made to suit the requirements of
end users. Thus, the delivery
schedule to cater to the order is
longer than many other engineering
products. However, due to various
reasons, including infrastructureconstraints, the delivery schedules
of Indian capital goods suppliers
are longer than their foreign
counterparts. Industry sources
estimate that the delivery time of
Indian capital goods manufacturers
are two times longer than their
global counterparts affecting the
competitiveness in delivery
schedules. In such circumstances,
imported capital goods are
preferred over Indian capital goods,
though they are technologically and
functionally comparable with
international standards.
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Strategies
Transformation in Objective
and Approach
Sale of capital goods is not an one-time business but require technicalsupport in transportation, erection,staff training (for operation andminor repairs), continuous servicemaintenance and periodicalupgradation in technology. All overthe world, the capital goodsmanufacturers are turning
themselves as engineering servicescompanies offering turnkeysolutions to retain the customers.Players in Indian capital goodsindustry may also increasinglyreorient their approach to transforminto service based organizations.Such service orientation would helpthe industry in sharpening thecompetitive advantage.
Strengthening Research and
Development
Consistent with global trends,Indian capital goods industry alsoneeds to grant highest priority toinnovation and research anddevelopment. The R&D intensity offirms in Indian capital goodsindustry is less than 1%, far belowthan the R&D intensity of othersectors such as pharmaceuticalsand automobiles. Precisionmeasuring, materials engineering,and process innovation are someof the areas for strengthening R&Din Indian capital goods industry. It
is also important to increase thelinkages between the publicresearch systems and industry tofacilitate technology transfer andenhance the responsiveness of thecapital goods industry.
Common R&D facilities underthe cluster approach or under thepublic-private partnership approachwould enhance the technologicalstrengths of the Indian capital goodsindustry. In this context, it may bementioned that the textile machinery
industry, with the support ofacademia and Government, has setup a R&D center at Indian Instituteof Technology (IIT), Mumbai. It isreported that textile engineeringrelated projects undertaken by post-graduate students in IIT, Mumbai, inthis R&D center, would be useful inproduct development and innovation
in process engineering in the textileengineering industry. Such R&Dcenters may be encouraged tocontribute to the technologydevelopment in other capital goodssub-sectors also.
Strengthening Technological
Competencies
In order to enhance productivity,product quality and operatingefficiency, the players in the sectorneed to constantly upgrade theirtechnological competencies. TheDepartment of Heavy Industry,Government of India, has proposedto undertake a comprehensivescheme for technology upgradation
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and R&D facilities for modernizationof capital goods industry. Theproposed scheme may endeavourto help the players in the Indiancapital goods industry in trackingglobal trends in product andprocess technologies, with specificobjective of cost control, besidesenhancing productivity, energyefficiency, eco-friendliness, productquality, operating flexibility andefficiency. The scheme may alsohelp enhance the usage of
information technology thatprovides convenience to thecustomers, and help enhancecustomer base and new avenuesfor profitability. Such R&D Centresmay also be conceived as trainingplatforms for skill upgradation of theshop-floor technicians in the capitalgoods industry.
Fund for Technology
Upgradation in Capital Goods Industry
It may be fair to surmise that thereare capacity constraints at thefollowing two levels in the capitalgoods industry:
a) Capacity constraints to cater to
the demand in volume,considering the growthmomentum in the industrialsector as also the overalleconomic growth;
b) Capacity constraints to cater tothe technological demands that
may improve efficiency inoperations and cost control.
While fiscal incentives would
help attract investments in the capitalgoods industry in general, addingproduction capacity, a fund forsupporting technology upgradation inthe capital goods industry may beconsidered in order to achievequality, standardization andbenchmarking with internationalproducts.
Enhancing Market Position
Analysis of trends in imports bymajor countries reveals that thereis vast scope for market expansionin many developing countries towhich India is currently exporting.Various market entry strategiesmay be adopted including attainingmarket leadership, through
acquisition and consolidation, andachieving economies of scale inprice sensitive markets. Mergersand acquisitions routes may also beadopted by the players in the Indiancapital goods industry, to build andnurture brands in export markets.Value-based supply chain may becreated through building
customized products and offer ofengineering services to createexclusiveness in competitivemarkets. Sales approach should betransformed to provide solutionsthat add value to the clients throughenhancement of process efficiencyand product quality.
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Introducing New Product
Lines
Over the years, players in the
Indian capital goods industry hasbeen diversifying the product linesoffered with the objective ofmitigating risks associated withbusiness and cyclical trends.However, more focus should begiven in building new generationmachines that may be in demandin future. Such new generationmachines should have greater
flexibility to produce a variety ofproducts. Such new generationmachineries also createopportunities for offeringengineering services that are lesssensitive to business and cyclicalfluctuations.
Tapping Outsourcing
Opportunities Globally, OEMs are increasinglyoutsourcing their design andengineering services to developingcountries like India to add value atlower cost and to focus on theircore competencies. According to aNASSCOM study, spending onengineering services across the
world is estimated to be US $ 750billion in 2004, which is expectedto cross US $ 1 trillion in 2020.While only 15-20 billion (2% of totaldemand) is being off-shored atpresent, the off-shoring market isexpected to grow to US $ 150billion to US $ 225 billion (around20% of total demand) by 2020.
Capital goods industry, one of thepotential players in India in theengineering services segment,holds significant potential to tap thegrowing business opportunities inthe outsourcing arena.
Increasing Interaction with End-Users
Capital goods manufacturers alsoneed to closely interact with end-users (especially sectors such asautomobile, defense, aeronatics,space, metals, construction,textiles, chemicals andpharmaceuticals), to understand thelatest trends in manufacturing; theexpectations of end users inperformance of machinery; areasfor improvement in processefficiency, energy efficiency, productquality, and cost control strategies.
The trends in shifting ofmanufacturing base fromdeveloped to developing countriescould also be unearthed throughinteractions with end-userindustries. Such interactions wouldhelp the players in capital goodsindustry to source appropriatetechnologies, in addition to makingplans towards capacityenhancement to cater to thegrowing demand.
Thrust on Safety Standards
and Product Liability
Exporting to USA and EU
requires the machinery
manufacturers to carefully consider
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the requirements for both regulatoryand liability protection. USA has acomplex, multi-tiered regulatoryenvironment for machinery and themanufacturers need to define themethod of indicating compliance withregulatory issues in most acceptablemanner. The Occupational Safetyand Health Administration (OSHA),the agency in USA, which isresponsible for regulating machineryused in the workplace, has definedthe product requirements and safety
standards, as also the periodicity ofevaluating safety audits. In EuropeanUnion, there are host of Directives,such as Machinery Directive 98/37/ EC, Lifts Directive (95/16/EC),Directive on Personal ProtectiveEquipments 89/686/EEC, Directiveon Noise Emissions 2000/14/EC,governing the safety standards ofcapital goods. In addition the EUDirective concerning Liability forDefective Products make EUimporters liable for the products theyimport, including the machinery theyprovide to their employees for work.Exporters of capital goods,particularly to USA and EU shouldcarefully follow the trends in productstandards and conform their
products to such safetyrequirements.
Accelerating Investments in Infrastructure
Growth in investments ininfrastructure sectors, especially forconstruction of road / rail network,bridges and dams, ports (both air
and sea), and handling facilities insuch ports and power stationsboost the demand for capitalequipments. This would be
significant in the case of electricalmachinery (investments in powersector) and construction / earthmoving equipments (investments inroad / rail infrastructure), whichwould have direct impact. Inaddition, investments ininfrastructure would boost themanufacturing sector and there by
provide growth opportunities forcapital goods such as machinetools, textile machinery and processplant machinery.
The consultation paper on‘Investment in Infrastructure Duringthe Eleventh Five Year Plan’, hasestimated that about US $ 500 billioninvestments are required in the
Indian infrastructure sector to sustainthe GDP growth of 9%, during theEleventh Five Year Plan. This worksout to approximately 2.3 times higheras compared to the actualinvestments in the infrastructuresector that have taken place in theTenth Five Year Plan. If this volumeof investment demand in theinfrastructure sector is met
systematically, the capital goodsindustry would get furthermomentum in demand.
Accelerating Capital
Investments in Indian Manufacturing Sector
Government may also consideroffering incentives to the
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manufacturing sector forupgradation of technology andequipments. The incentives thatmay be considered are taxconcessions, accelerateddepreciation allowances and exciseduty relief. Such strategy may beparticularly relevant for SME sectorthat would be encouraged toupgrade their technologicalcompetence, manufacturingprocess and product quality.
IN SUMIndia should leverage its inherentstrengths, such as availability ofpool of skilled workforce, low costoperations and existence of largedomestic demand, in strengtheningcapital goods industry. Leveragingthe abundant availability of softwareskills in engineering design and
drawing would strengthentechnological competitiveness.Continuous training and skillupgradation would help the humanresources in the industry to capturethe trends in new processes andtechnologies.
Scale economies would positionIndia further as a cost-effective
manufacturing base for capitalgoods. Strategies such astransformation of the shop-floors fullyflexible to produce different types of
machineries and redesigning themachining process to accommodateusage of common components / parts in various types of machineries,would contribute to the scaleeconomies significantly.
Technology sourcing fromcountries such as Germany,Switzerland, Italy and Spain may beencouraged, especially in the contextof shift in manufacturing base fromdeveloped to developing countries.
The strengths of machiningtechnologies in other developingcountries such as China and Taiwanshould be effectively adapted byIndian players.
Changing trends in productquality and safety standards shouldbe monitored and complied tosustain market presence in
developed countries. Developingcountries of Asia, Africa, LatinAmerica and central and east Europeshould be targeted for marketexpansion as these countries arehaving almost similar raw materialand manufacturing base, like India.Effective supply chain managementand thereby optimizing the product
delivery schedules should be giventop priority to retain the existingcustomers as also to fetch newcustomers.
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Capital goods industry is thebackbone of the manufacturingactivity. A vibrant capital goodsindustry is a pre-requisite to propelthe growth of the manufacturing
activity in any country. InternationalStandard Industrial Classification(ISIC) of all economic activities(Revision – 3) classifies most of thecapital goods items under threedivisions (29, 30 and 31) with thefollowing codes:
291 - Manufacture of GeneralPurpose Machinery
292 - Manufacture of SpecialPurpose Machinery
293 - Manufacture of DomesticAppliances
300 - Manufacture of Office,Accounting and ComputingMachinery
311 - Manufacture of ElectricMotors, Generators, andTransformers
312 - Manufacture of ElectricityDistribution and ControlApparatus
313 - Manufacture of InsulatedWires and Cables
314 - Manufacture ofAccumulators, Primary
Batteries315 - Manufacture of Electric
Lamps and LightingEquipments
319 - Manufacture of OtherElectric equipments
In addition, divisions 32(Manufacture of radio, television and
communication equipment andapparatus) and 33 (Manufacture ofmedical, precision and opticalinstruments) are also considered ascapital goods, mainly used inelectronics or services industries.
A study commissioned by theGovernment of India4 has definedcapital goods as plant machineries
for agricultural, industrial andcommercial segments of economicactivities that have economic assetlife of over 3 years.
The Index of IndustrialProduction (IIP) compiled by the
1. INTRODUCTION
4 Department of Industrial Policy and Promotion, Ministry of Commerce andIndustry, Government of India.
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Central Statistical Organisation(CSO), Government of India, hasclassified capital goods under use-based classification having a weightof 9.2% in IIP. Over 50 items arecovered under the capital goodsindustry. The list of products alongwith the corresponding weights in IIPis given at Annexure -1.
Considering the list of itemscovered under the head ‘capitalgoods’ in calculation of IIP, this studyhas analysed the major segmentssuch as machine tools, machineryand equipments (such as textilemachinery, electrical machinery,earthmoving and constructionmachinery, and process plantequipments).
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According to a study by United
Nations Industrial DevelopmentOrganisation (UNIDO), Japan is the
largest manufacturer of electricalmachinery and apparatus (ISIC
Code 31) in 2005, with a share of
55.2% in the year 2005. Other majorproducers were USA (10.0%), China
(8.9%), Germany (6.9%) and France(2.6%). India holds a share of 1.7%
in global production of electrical
machinery and apparatus in 2005.Amongst developing countries,
China is the largest producer with a
share of 55% in cumulativeproduction of developing countries,
followed by India with a share of10.2%, and Brazil (7.2%).
There has been a shift inproduction of electrical machinery
and apparatus in the last one decadewith many of the Asian countriesmoving up in both the ranking andmarket share. While Japan hasincreased its share from 44.3% in1995 to 55.2% in 2005, China andIndia have increased their shares,from 3.9% and 0.9% in 1995, to 8.9%and 1.7%, respectively. Both Chinaand India have also moved up their
ranking; while China has moved upfrom fifth position to third position,
SOURCE: International Yearbook of Industrial Statistics, 2007, UNIDO.
Exhibit –1:LEADING PRODUCERS OF ELECTRICAL MACHINERY AND
APPARATUS (ISIC 31)
2. CAPITAL GOODS INDUSTRY -
GLOBAL SCENARIO
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India has moved up from eleventhposition to sixth position.
In the case of other machinery
and equipments (ISIC 29), whichmainly consist of general purposemachinery (engines, turbines,pumps, compressors, taps, valves,bearings, gears, ovens, furnaces,lifting and handling equipments) andspecial purpose machinery (such asagricultural machinery, machinetools, metallurgical machinery,mining / quarrying / constructionmachinery, textile / leathermachinery, and food processingmachinery), USA is the world’sleading producer with a share of19.4% in world production in 2005,followed by Japan (15.6%),Germany (14.9%) and China (7.3%).India is ranked at 11th position inworld production with a share of
1.4%. Amongst developingcountries, China is the major
producer of non-electrical machineryitems (ISIC 29) with a share of 33.8%in 2005. India is fourth largestmanufacturer with a share of 6.7%in the total production of developingcountries.
In value terms, the global capitalgoods industry is estimated to havegenerated total revenue of US $ 4.5trillion in 2006, according to a reportby Datamonitor. The capital goodsindustry has seen fluctuations in itsgrowth rate over the past few yearsand experienced a CAGR of 2.7%during the period 2002-2006.
United States is the majorcountry accounting for 31% of theglobal market value in 2006. Europeas a region accounted for around28%, followed by the Asia-Pacificregion (27%).
Globally, trade in capital goods5
was valued at over US $ 1.5 trillion
SOURCE: International Yearbook of Industrial Statistics, 2007, UNIDO.
Exhibit – 2:LEADING PRODUCERS OF OTHER MACHINERY AND
EQUIPMENTS (ISIC 29)
5 WTO statistics
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in 2006. Thus, the capital goodstrade accounts for 12% in worldmerchandise trade and 17.5% inworld trade in manufactures. Theshare of exports in total worldproduction is estimated to be one-third. Germany is the largest exporterof capital goods in the worldaccounting for 13% of global exportsin 2006. China and the USA comenext with shares of 12% and 11%,respectively.
The trends in production andtrade in select capital goods sub-segments are discussed below:
MACHINE TOOLS
The total production of machinetools by the top 29 global producerswas more than US $ 70 billion in2007, experiencing a growth of
18% over the previous year. Japanis the largest producer of machinetools accounting for 20% of theworld production. Other majorproducers are Germany (18%),China (14%), Italy (10%), Korea(6.5%) and Taiwan (6%). In fact,following the unification ofGermany, the country has remainedas world’s second-largest producer,except in 1999 and 2002, when itedged out Japan for the numberone slot.
In terms of consumption ofmachine tools, China tops the listwith total consumption worth nearlyUS $ 15 billion, showing a growth of17% over the previous year. Japanand Germany comes next with aconsumption level of more than US$7 billion each. The consumption level
SOURCE: Datamonitor
Exhibit 3:REVENUE GENERATION AND GROWTH IN GLOBAL CAPITAL
GOODS INDUSTRY
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for India is around US$ 1.8 billion,thus being the 9th largest consumerof machine tools. The growth rate of
consumption is in fact highest amongthe top 20 countries (49%).
Table 1:WORLD PRODUCTION OF MACHINE TOOLS –2007
Share of
Rank Country Production Cutting Forming(in US$ Million) Tools Tools
1 Japan 14,443.50 88% 12%
2 Germany 12,725.40 76% 24%
3 China 10,090.00 71% 29%
4 Italy 7,272.70 49% 51%
5 South Korea 4,550.00 68% 32%
6 Taiwan 4,378.00 80% 20%
7 United States 3,578.00 79% 21%8 Switzerland 3,323.80 85% 15%
9 Spain 1,436.80 67% 33%
10 Brazil 1,157.80 81% 19%
SOURCE: Gardner Publication Inc.
Table 2:WORLD CONSUMPTION OF MACHINE TOOLS
(US $ Million)
Rank Country 2007 2006 Growth (%)
1 China 15,390.0 13,113.0 17.0
2 Japan 7,619.4 7,858.6 -3.0
3 Germany 7,252.1 5,139.7 41.0
4 USA 6,171.8 6,361.2 -3.0
5 Italy 5,056.0 3,786.2 34.0
6 South Korea 4,150.0 4,020.0 3.0
7 Taiwan 3,785.0 2,887.0 31.0
8 Brazil 1,822.2 1,423.2 28.0
9 India 1,774.8 1,191.2 49.0
10 Mexico 1,669.6 1,245.9 34.0
SOURCE: Gardner Publication Inc.
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In terms of per-capitaconsumption6, however, Switzerlandtops the list with the per capitaconsumption being US $ 172 in2007. Other major countries in termsof per capita consumption includeTaiwan (US $ 166), Austria (US $ 97),Germany and Italy (US $ 87 each).
World export of machine tools isestimated to be over US $ 40 billionin 2007, a growth of 18% over theprevious year. The export orientationof global machine tool industry thusworks out to over 50% in 2007.Germany is the largest exporter ofmachine tools in the world, exportingmachine tools valued more than US$9 billion in 2007. Germany exportedover 70% of its production in 2007.Other major exporters include Japan
(US $ 7.6 billion), Italy (US $ 4.2billion), Taiwan (US $ 3.4 billion) andSwitzerland (US $ 2.5 billion).
As far as the import isconcerned, China leads the world,with an estimated import value of US$ 6.9 billon in 2007. The UnitedStates (US $ 4.4 billion), Germany(US $ 3.7 billion) and Taiwan (US $2.8 billion) are other major importers.Amongst developing countries,Mexico and India are emerging asmajor importers of machine tools.
CONSTRUCTION AND MININGMACHINERY
Global construction and miningmachinery industry is estimated tohave generated a total revenue ofUS $ 113 billion in 2006. The
Table 3:WORLD EXPORT OF MACHINE TOOLS
(US $ Million)
Rank Country 2007 2006 Annual Growth
1 Germany 9,167.80 7,516.00 22%
2 Japan 7,610.10 6,513.00 17%
3 Italy 4,207.60 3,318.70 27%
4 Taiwan 3,408.00 2,964.00 15%
5 Switzerland 2,457.50 2,236.70 10%
6 South Korea 1,800.00 1,450.00 24%
7 United States 1,659.80 1,802.30 -8%
8 China 1,600.00 1190.00 34%
9 United Kingdom 922.20 879.20 5%
10 Belgium 873.20 721.30 21%
SOURCE: Gardner Publication Inc.
6 Consumption weighted by population.
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industry had experienced severalyears of decline in growth, sincethe beginning of the decade, butpicked up in recent years. Theindustry experienced a 7% growthin the year 2005, which, however,came down to 4% in 2006. TheCAGR for the industry during theperiod 2002-06 stood at 4.7%.
According to Datamonitoranalysis, the upturn is mainly due tothe improved performance of majorend-user industries like construction,agriculture and manufacturing.Construction sector witnessedgrowth, both in developed anddeveloping countries, during thisperiod. In the developed countries,such as USA and Europe, the growthin construction activity was fuelled byincreased demand for new office
space. In developing countries ofAsia-Pacific and eastern Europeanregion, investment in infrastructureincreased substantially. Increasinggrowth in extractive activities in Africaregion also led the growth in theglobal construction and miningindustry.
The largest segment of globalconstruction and mining machineryindustry is earthmoving equipment,which accounts for about 18% of theindustry size. Other major segmentsinclude harvesting equipment (13%),industrial tractors (10%) and otherindustrial rolling machines (8%).Geographically, USA dominates theglobal construction machineryindustry, accounting for almost 39%of the world market. Asia-pacific(30%) is the second largest region,
Table 4:WORLD IMPORT OF MACHINE TOOLS
(US $ Million)
Rank Country 2007 2006 Annual Growth1 China 6,900.00 7,243.00 -5%
2 USA 4,253.60 4,474.60 -5%
3 Germany 3,694.50 2,535.40 46%
4 Taiwan 2,815.00 2,010.00 40%
5 Italy 1,990.90 1,397.40 42%
6 Mexico 1,544.80 1,397.40 34%
7 South Korea 1,400.00 1,358.00 3%
8 India 1,317.80 837.1 57%9 France 1,252.00 1,071.60 17%
10 United Kingdom 1,178.30 921.60 28%
SOURCE: Gardner Publication Inc.
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followed by Europe (28%), in theworld, in production of constructionand mining machinery.
Caterpillar, Inc, USA, is one ofthe major firms in the constructionmachinery sector. The company haspresence spanning across the world.
Few other major players include:Deere & Co., CNH Global, andKomatsu. Deere & Co. operates inUSA and Canada. It specializes inmanufacturing and distribution ofagricultural equipments, constructionand forestry equipment andcommercial and consumer turfequipment.
According to Association ofEquipment Manufacturers in USA,the growth outlook for theconstruction equipmentmanufacturers would be of the orderof 8% in the year 2008, as comparedto the estimated growth of 9.5% in
2007. Earthmoving equipment andlifting equipment are the two sub-segments that have tremendouspotential for growth.
INDUSTRIAL MACHINERY
World market for industrialmachinery, equipment and suppliesis estimated to be US $ 345 billion
Exhibit 4:GLOBAL CONSTRUCTION AND MINING MACHINERY INDUSTRY:
VALUE & GROWTH
SOURCE: Datamonitor
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in 2006. Asia is the leading marketfor industrial machinery accountingfor around 32% (US $ 109 billion)of world market in 2006. NorthAmerica and Europe are the othermajor markets accounting for 25%share each in the world industrialmachinery market. According toICON Group, the industrialmachinery market is expected tocross US $ 500 billion in 2011, aCAGR of 8%
IN SUM
The global capital goods industry
is on a growth path and there have
been many new countries emergingas new players, especially the
Asian countries. With the ample
opportunities available, this industry
would see a lot of changes in the
future along with greater scope for
further growth and development.
SOURCE: ICON Group Inc., USA.
Exhibit 5:GLOBAL MARKET FOR INDUSTRIAL MACHINERY
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INTRODUCTION
The capital goods industry is thebackbone of India’s manufacturingsector. India produces wide rangecapital goods, including machineryand machine tools. Some of theprominent capital goods producedin India include heavy electricalmachinery, textile machinery,machine tools, earthmoving andconstruction equipment includingmining equipment, roadconstruction equipment, materialhandling equipment, oil & gas
exploration equipment, sugarmachinery, food processing andpackaging machinery, railwayequipment, metallurgicalequipment, cement machinery,rubber machinery, process plantsmachinery & equipments, paper &pulp machinery, printing machinery,dairy machinery, industrialrefrigeration and industrial furnaces.
Indian capital good industry, inthe recent years has been witnessingbuoyancy after undergoing aprolonged period of cyclical andrecessionary phase. From 1994-95,the Indian capital goods industry haswitnessed a cyclical phase, andthereafter the sector witnessed a
recessionary phase till 2001-02. In2001-02, the Indian capital goodsindustry witnessed a negativegrowth, mainly due to decelerationin production of transport
equipments. However, since 2002-03, the sector has been witnessingbuoyancy in the production trends,as is evident from Exhibit -6. Thoughthe growth momentum hasmarginally slowed down in 2007-08,the capital goods sector stillcontinues to be the driver of growthfor IIP.
Under the two-digitclassification, in the index ofindustrial production, capital goodsare classified as:
35 & 36 - Machinery andequipments, other thantransport equipments;
37 - Transport equipments
The movement in the productionindex of these two categories showsa cyclical trend over the last onedecade. However, in many years,both the segments have witnesseda year-on-year growth of over 10%,contributing to the overall upwardmovement of IIP.
3. CAPITAL GOODS INDUSTRY IN INDIA
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Capacity creation in the Indian
capital goods industry has beengrowing, since liberalization, and intune with the overall growth inindustry. Cumulative foreign directinvestments (actual inflows) in thecapital goods industry amounted toover US $ 1.6 billion since January2000. Details of sector-wise FDIinflows are given in Table - 5.
ANALYSIS OF SUB-SEGMENTS
The study focuses on the status ofthe following segments of capitalgoods industry in India.
a) Non-electrical machinery(machinery not used inelectrical industry)
1. Machine tools
SOURCE: Central Statistical Organisation, Government of India.
Exhibit 6:MOVEMENT IN INDEX OF CAPITAL GOODS INDUSTRY VIS-À-VIS
IIP IN INDIA
SOURCE: Central Statistical Organisation, Government of India.
Exhibit 7:MOVEMENT IN PRODUCTION INDEX OF SUB-SEGMENTS OF CAPITAL
GOODS INDUSTRY
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Table 5:FDI INFLOWS IN SELECT CAPITAL GOODS SECTOR IN INDIA
Sub-segments 2000-03 2004 2005 2006 2007 Total(Jan-Dec) (Jan–Dec) (Jan-Dec) (Jan-Dec) (Jan-Dec) Rs. US $
Million Million
Electrical equipments 11,089.16 4933.13 1075.55 3746.32 24872.69 45716.86 1055.25
Machine tools 1362.69 2652.70 1001.11 1579.25 1966.07 8561.81 193.68
Industrial machinery 2698.18 430.76 1474.73 1169.92 901.3 6674.89 149.53
Agricultural machinery 854.34 0 2777.52 2527.51 240.44 6399.82 142.18
Earthmoving machinery 755.96 5.22 2313.00 45.79 2611.36 5731.34 134.04
Boilers and steam 1.97 0 23.40 149.85 42.3 217.52 4.86generating plants
Prime movers 0 2.49 0 0 11.6 14.09 0.34
Total above 16,762.30 8024.30 8665.31 9218.64 30645.76 73316.33 1679.88
SOURCE: Department of Industrial Policy and Promotion, Government of India.
2. Textile machinery
3. Construction and miningmachinery
4. Process plant machinery
b) Electrical machinery (Machineryused in electrical industry)
1. Transformer industry
2. Switchgear and controlgear
3. Capacitors
4. Motors and generators
Non Electrical Machinery
Machine Tools
The machine tools sector can bebroadly classified into the followingsegments:
The machine tools sector is oneof the important segments of the
Exhibit 8:CLASSIFICATION OF INDIAN MACHINE TOOLS SECTOR
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capital goods industry in India. Thesector is recognised as a provider ofcost-effective high quality lean-manufacturing solutions. The sectormanufactures almost the completerange of metal-cutting and metal-forming machine tools. Customizedin nature, the products from theIndian basket comprise conventionalmachine tools as well as computernumerically controlled (CNC)machines.
The industry has been showingan increasing trend in bothproduction and exports over the lastdecade. However, export orientationof the machine tools sector has beencoming down – from a level of 67%in 2002-03 to 51% in 2006-07.
Total production of machinetools in the country reached the levelof more than Rs. 2000 crores by theend of the year 2006-07, showing a
growth rate of almost 15% over theprevious year. The break–up ofproduction under various segmentsof machine tools sector is given inTable - 6. While the Groups A & Bhave witnessed impressive growthrates in 2006-07, over the previousyear, Group C has witnessednegative growth, due to which theoverall growth in the machine toolsector has come down.
The Numerical Code (NC)
machines and Non NC machinesbelonging to the Group A showed agrowth of 28% and 27%, respectivelyduring 2006-07, over the previousyear. Machine tools of Non NC typebelonging to the group B alsoexperienced a growth rate of 34%during the same period. However,Group C category of machine toolswitnessed a negative growth of 55%,pulling down the overall growth for
SOURCE: Exim Research; Data Sources from Indian Machine ToolsManufacturers Association and Directorate General of Commercial IntelligenceStatistics, Government of India.
Exhibit 9:PRODUCTION AND EXPORT PERFORMANCE OF INDIAN MACHINE
TOOLS SECTOR
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this sector. HSS gear tools,Abrasives, HSS drilling tools, HSSmilling tools, tools for tapping andthreading, milling cutters are someof the Group C category of machinetools that have witnessed negativegrowth rate in 2006-07.
Indian machine toolmanufacturers have been able toexplore the international markets too.Strategies such as productdevelopment with enhancedfeatures, competitive pricing, andmarket focus have been helping theplayers to enhance their marketpresence in international markets,particularly in Europe, the UnitedStates, and east-Asian countries.Lathes and automats, presses,electro-discharge machines, andmachining centres formed the bulk
of export orders for Indianmanufacturers.
Export of machine tools has
shown a steady increase in the lastfew years. In the year 2006-07,export of machine tools was worth
Table 6:PRODUCTION OF MACHINE TOOLS IN INDIA
Machine Tools Value (in Rs. Million) Growth (%)
2005-06 2006-07Group A (large size machine tools)
NC Machines 9442.94 12052.53 27.64
Non NC Machines 4078.15 5164.33 26.63
Group B (medium size machine tools)
NC Machines - -
Non NC Machines 1866.03 2494.53 33.68
Group C (small size machine tools)
NC Machines - -Non NC Machines 2804.97 1246.67 -55.55
Total 18192.09 20958.05 15.20
SOURCE: Indian Machine Tools Manufacturers’ Association
Table 7:EXPORT OF MACHINE TOOLS
FROM INDIA
Year Exports(in US $ Million)
2001-02 102.48
2002-03 121.03
2003-04 140.75
2004-05 176.57
2005-06 230.39
2006-07 234.75
SOURCE: Directorate General ofCommercial Intelligence andStatistics
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more than US $ 234 Million. Duringthe period April – December 2007,machine tools export stood at US $209.81 million, an increase of over28%, over the same period in theprevious year.
USA is the largest market forexport of machine tools from India.In the year 2006-07, USA accountedfor 19% (US $ 45.25 million) ofIndia’s total export of machine tools.Other major markets include
Germany (8.1%), UAE (5%),Singapore (4.7%), and US (4.6%).
Textile Machinery
Textile is one of the major exportitems of India contributing to over11% in India’s export earnings.Indian textile machinery sectorstarted as an offshoot of the textile
industry to cater to the capital
expenditure demand of the textile
units. In the initial years, the growth
in the Indian textile machinery
sector was hampered due to
increasing demand for automated
machines. However, the Indian
textile machinery sector started
producing automated machines,
with innovation, envisaging growth
in capacity expansion in the textile
industry in the post-quota regime.
The thrust given by the
Government of India for
upgradation of technology (through
the Technology Upgradation Fund
Scheme - TUFS) also contributed
to the growth in demand for textile
machinery.
Textile machinery productionhas shown steady increase in therecent years. The total production of
textile machinery in the country
SOURCE: Directorate General of Commercial Intelligence and Statistics
Exhibit 10:MAJOR EXPORT DESTINATIONS OF MACHINE TOOLS FROM INDIA
(2006-07)
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increased from around Rs. 1175crores in 2002-03 to more thanRs.3000 crores by 2007-08.Segments like spinning & alliedmachinery, processing machinery,have experienced growth inproduction during this period.
The capacity of the sector (invalue terms) was estimated at Rs.3000 crores 2003-04, which hasincreased to around Rs. 3800 croresin 2007-08. The capacity utilizationthus works out to around 80% in2007-08.
Table 8:TRENDS IN PRODUCTION OF TEXTILE MACHINERY IN INDIA
(Value in Rs. Million)
CATEGORIES 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08(P)
Spinning & 5816.68 6811.63 9957.79 13232.05 19910.45 22719.45allied machinery
Synthetic fibre machinery 962.98 982.84 510.35 366.89 223.8 404.58Weaving & 782.49 875.79 1166.64 1586.19 1572.86 1148.96
allied machineryProcessing machinery 731.92 1109.87 1358.07 2421.69 1644.39 921.43Miscellaneous 69.91 94.02 121.02 120.61 122.48 129.71
(Spinning, Weaving &Processing machines)
Textile testing/measuringinstruments machinery 387.84 497.98 578.01 647.69 630.81 437.01
Hosiery machinery & needles 260.72 442.71 391.91 425.26 338.74 354.72
Total 9012.54 10814.84 14083.79 18800.38 24594.02 26306.82
Spares & accessories 2737.9 2591.15 2764.35 3323.00 3396.80 3780.86
Grand Total 11750.44 13405.99 16848.14 22123.38 27990.82 30087.68
SOURCE: Office of the Textile Commissioner, Textile Machinery Manufacturers Association
SOURCE: Office of the Textile Commissioner, Textile Machinery Manufacturers Association
Exhibit 11:TEXTILE MACHINERY – TRENDS IN CAPACITY, PRODUCTION AND
CAPACITY UTILIZATION
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SOURCE: Directorate General of Commercial Intelligence and Statistics
Though not a significant volume,
India still exports textile machinery.
In the last few years, value of exports
of textile machinery was hovering
around less than Rs. 500 crores.
However, as a result of increasing
activities in the textile industry, import
of textile machinery is on the rise.
Total import of textile machinery
during the year 2006-07 was
estimated to be more than Rs. 9,000
crores, thus showing a growth rate
of around 33% over the previous
year. During the period April – July2007, export of textile machinerystood at Rs. 189 crores, whereasimport value during this period stoodat Rs. 2465 crores.
Segment-wise exports show thatspinning machinery is the largestimport item accounting for more than40% of total textile machineryimports. Other major items areknitting machinery (19%), weavingmachinery (13%), and processingmachinery (12%).
Exhibit: 12:EXPORT AND IMPORT OF TEXTILE MACHINERY FROM INDIA
(In Rs. Million)
SOURCE: Directorate General of Commercial Intelligence and Statistics
Exhibit: 13:SEGMENT WISE IMPORT OF TEXTILE MACHINERY IN INDIA (2006-07)
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With respect to exports, majorityof India’s textile machinery exportsare in the form of auxiliary machinery,having a share of 86% in 2006-07.Other major export items arespinning machinery (17%),processing machinery (9%) andwashing machines (7%).
The success of the textilemachinery sector depends largely ontechnology and branding.Considering that many Indian textilemachinery manufacturers havestarted in-house research anddevelopment activities, the sector ispoised for further growth. Recently,leading textile machinerymanufacturers have collectivelyestablished a research anddevelopment centre at the IndianInstitute of Technology, Mumbai.
Construction and Mining
Machinery
There is an all-pervasive boom in
the housing and infrastructureactivities in India, which is likely todrive the associated sectors suchas manufacture of construction andmining equipments. India producesa wide range of construction andmining machinery – such ashydraulic excavators, wheelloaders, backhoe loaders, bulldozers, dump trucks, tippers,
graders, pavers, asphalt drum / wetmix plants, breakers, vibratorycompactors, cranes, fork lifts,dozers, off-highway dumpers (20Tto 170T), drills, scrapers, motorgraders, rope shovels etc. Theyperform a variety of functions likepreparation of ground, excavation,
SOURCE: Directorate General of Commercial Intelligence and Statistics
Exhibit: 14:SEGMENT-WISE EXPORT OF TEXTILE MACHINERY FROM INDIA(2006-07)
Source:
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haulage of material, dumping/layingin specified manner, materialhandling, road construction etc.
The construction and miningmachinery sector in India haswitnessed a phase of reorientationin the last few years throughacquisitions and joint ventures. Thisalso reflects the active interest ofinternational majors in the domesticmarket. However, given the heavysunk cost involved in the sector, the
number of producers in eachsegment is few. Many internationalplayers have also appointed sellingagents for importing and sellingcomplete equipments in India.
Major players are Bharat EarthMovers Ltd (BEML) and TELCOconstruction equipment in the earthmoving machinery segment; Escorts
and Gujarat Apollo Instruments in theconstruction machinery segment;Mcnally Bharat Engg. Co., EleconEngg. Co., TRF, Godrej & Boyce,and Voltas in the material handling
equipment segment; ActionConstruction Equipment, TIL andMukand in the cranes segment; andOTIS and Johnson in the lifts andescalators segments.
Export performance of Indianconstruction and mining equipmentindustry is given in Table 11. It maybe noted that in India, being a largeand growing economy, the domesticdemand is greater than theproduction capacity and thus themajor portion of demand is metthrough imports. Major items ofimports include lifting, handling,loading and unloading machines;self-propelled bulldozers, scrapers,and graders; and derricks, cranes,mobile lifting frames. Import growth(CAGR) in the last three years hasbeen over 45%. Indian constructionand mining machinery sector is also
exporting to various countries,including developed countries suchas USA, UK, and Singapore. Majoritems of export include moving,grading, pile-extracting machineries.
Table 9:INDIAN CONSTRUCTION AND MINING MACHINERY: INDUSTRY SIZE
Sl. No Category Estimated size in Rs. crores(2006-07)
1 Earthmoving machinery 4500.00
2. Construction machinery 700.00
3. Material handling equipments 1600.00
4. Cranes 800.00
5. Lifts and escalators 700.00
Total above 8300.00
SOURCE: Industry – Market Size and Shares, CMIE
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Table 10:MARKET SIZE AND LEADING PLAYERS: SELECT SEGMENTS OF
CONSTRUCTION AND MINING MACHINERY (2006-07)
Major Products Companies Market Share (%)
Earthmoving Machinery Bharat Earth Movers Limited 39.97Total Market Size: Telco Construction Equipment Co. 28.22Rs. 4500 crores L&T- Komatsu 13.20
Larsen & Toubro 4.60
Construction Machinery Escorts Construction Equipment 48.85Total Market Size: Gujarat Apollo Inds. 19.00Rs. 700 crores Ashoka Buildcon 6.57
Sayaji Iron & Engg. Co. 4.42Apollo Industrial Products 3.80
Material Handling Mcnally Bharat Engg. Co 24.87
Equipment Elecon Engg. 21.68Total Market Size: TRF 16.68Rs. 1600 crores Godrej & Boyce 10.18
Voltas 7.18
Cranes Action Construction Equipment 26.62Total Market Size: TIL 19.50Rs. 800 crores Mukand 14.00
Hercules Hoists 10.75Greaves Cotton 9.00
Lifts and Escalators OTIS Elevators 64.34
Total Market Size: Johnson Lifts 33.22Rs. 700 crores
SOURCE: Industry: Market Size and Share, 2007; CMIE
Table 11:EXPORT PERFORMANCE OF SELECT CONSTRUCTION AND MINING
MACHINERY (2006-07)
ITC HS Description Exports ImportsCode
8425 Pulley, tackle and hoists other than 6.99 24.22skip hoist; winches and capstans; jacks
8426 Derricks, cranes, mobile lifting frames etc 18.43 265.90
8427 Fork-lift trucks, other works trucks with lifts etc. 6.82 34.50
8428 Lifting, handling, loading & unload machines 27.44 342.97
8429 Self-propelled bulldozers, graders, scrapers etc. 26.59 283.05
8430 Other Machineries for moving, grading etc,pile-extractors, snow-ploughs etc 44.03 285.40
Total 130.30 1236.04
SOURCE: Directorate General of Commercial Intelligence and Statistics
(US $ Million)
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Process Plant Machinery
The process plant machinery andcomponents sector in India is a
heterogeneous segment of capitalgoods industry. The sector catersto a wide range of processindustries like oil and gas,petroleum refining, petrochemicals,chemicals, fertilizers,pharmaceuticals. metal processing,cement, paper, sugar, and foodprocessing. The sector designs andmanufactures a wide range of
equipment and systems such as:pressure vessels, columns, towers,heat exchangers, multi-tubularreactors, evaporators, crystallizers,dryers, road/rail tankers, storageequipments, equipment for dairyand food processing, mineralbeneficiation equipments, rotarykilns, equipments for solid-liquid
separation, equipment for waterand waste water treatment.
The sector is highly capitalintensive with a strong engineeringorientation (thus knowledgeintensive also), where the productsare mostly custom built. Henceeconomies of scale have lessrelevance in this sector except for the
machine, or labour utilization factor,if workload is not uniform.
Due to the heterogeneousnature of the sector, the processplant industry is fragmented innature. Some large as well asmedium sized companies are welldiversified in terms of product range
and areas of applications.International companies (such asAtlas Capco, Alfa Laval, J.L. Smith,Sulzer) also have presence in Indiathrough joint ventures or technologytie-ups. Besides, the internationallyrenowned consultants in the processindustries like Flour Daniel, Bechtel,Foster Wheel, LG, Daelim, Jacobs,Kvaerner, Mitsui Babcock, Linde,ABB Lummus, Technip, Stone &Webster, Udhe and ToyoEngineering have offices in India.
The market size and majorplayers in select segments ofprocess plants / machineries aregiven in Table - 12.
Few of the Indian companieshave made their mark in the exportarena due to their manufacturing skilland quality. These companies areequipped with modern machineryand are producing sophisticatedequipments such as high-pressureheat exchangers, spiral heatexchangers, multi-wall vessels, air-fin coolers, multi-tubular reactors etc.Export and import of select processplant equipment / machineries aregiven in Table - 13.
Major categories of exportsinclude: machinery / plant, laboratoryequipment for heating or cookingexcl. household; centrifugemachines, including dryers, filteringor purifying machinery; metal rollingmills and rolls thereof. India’s importof process plant machinery weremainly centrifuge machines,
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including dryers, filtering or purifyingmachinery; machinery / plant,laboratory equipment for heating orcooking (excluding household use);
Metal rolling mills and rolls thereof;refrigeration and freezing equipment,electric or others; converters, ladles,ingot moulds and casting machinesused in metallurgy. Exports in the lastcouple of years have grown at aCAGR of 36%, while the importgrowth (CAGR) has beenaround 49%.
Electrical Equipments andMachinery
The electrical equipment andmachinery sector comprises arange of products, such astransformers, switchgears, motors,generators and control equipment.Electrical equipment and machineryis principally used in the power
industry (generation, transmissionand distribution) as well as in othermanufacturing industries, such asautomobiles, cement, steel,
petrochemicals and refining.A few large players, such as
BHEL, ABB, Alstom, Siemens, andCrompton Greaves, dominate theelectrical equipment industry.However, there are several small andmedium sized players specializing inspecific product lines. The rawmaterial cost in total operating cost
of the sector is estimated to besignificant. The primary rawmaterials are copper, aluminium andsteel.
Indian electric machinery sectorcaters to most of the indigenousdemand. In select segments,especially to meet the demand forhighly sophisticated equipments,
Table 12:MARKET SIZE AND LEADING PLAYERS IN PROCESS PLANTS,
MACHINERY AND EQUIPMENTS
Segments Market Size Leading Players(2006-07)(Rs. Crores)
Chemical Machinery 2500 L&T, Godrej, Ingersoll-Rand, BharatHeavy Plate and Vessel, TemaIndia.
Cement Machinery 250 L&T, Walchandnagar Industries,Alsthom, KCP, CIMMCO
Sugar Machinery 700 Thyssenkrupp, Fives Cail KCP,Texmaco.
Metallurgical Machinery 300 L&T, Tata Steel, Disa India, Mukand
Total (above) 3750
SOURCE: Industry: Market Size and Shares, CMIE, 2008.
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sourcing is done through imports.Switchgear is the fastest growingsegment of this industry. Bothproduction and sales of electricalequipment has shown steady rise inthe recent times, particularly from
2002-03 onwards. The structure ofthe electric equipment sector is givenin Exhibit -15. The market size of theelectrical equipment sector is givenin Table - 14.
Table 13:EXPORT OF SELECT PROCESS PLANT EQUIPMENTS / MACHINERY
FROM INDIA (2006-07)
ITC HS Description US $ MillionCode Exports Imports
8402 Vapour generating boilers 74.89 19.56(excluding central heating water boilers),
8403 Control heating boilers 12.31 2.09
8404 Auxiliary plant used with boilers, condenserfrom steam and other vapour power unit 24.12 8.49
8410 Hydraulic turbines, water wheels, regulators 9.89 21.11
8416 Furnace burners for liquid fuels, for pulverized
soil fuel, for gas; mechanical stockers, etc., 10.32 30.498417 Industrial or laboratory furnaces or ovens,
non-electric 28.77 126.99
8418 Refrigeration and freezing equipment,electric or others 92.61 175.92
8419 Machinery / Plant, laboratory equipment forheating or cooking excl. household. 257.54 293.25
8420 Calendering / Rolling machines 10.46 14.04
8421 Centrifuge machines, including dryers;filtering or purifying machinery 116.25 342.99
8435 Presses, crushers or similar machinery usedin manufacture of wine, cider, fruit juices 5.81 9.9
8438 Other industrial machinery in preparation offood / drink etc., 60.72 60.72
8454 Converters, ladles, ingot moulds and castingmachines used in metallurgy 37.45 163.36
8455 Metal rolling mills and rolls thereof 104.7 243.72
Total 822.07 1512.63
SOURCE: Directorate General of Commercial Intelligence and Statistics
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Transformer Sector
Transformer is a crucial componentin transmission and distribution ofelectricity. The transformer industryis usually divided into distribution
transformers, power transformersand other types of specialtransformers for welding, traction,furnace etc. The transformerindustry in India has been in the
forefront for over 50 years and hasa well-matured technology-base inthe sub-segment of up to 800 KV.The transformer market in India isin a growth path, as there is agrowing demand for power in thecountry. There are about 150transformer companies in India,with an overall production of over90,000 MVA per annum.
Exhibit: 15:STRUCTURE OF THE ELECTRIC EQUIPMENT INDUSTRY
Table 14:MARKET SIZE AND LEADING PLAYERS IN TRANSFORMER INDUSTRY
Segments Market Size Leading Players(2006-07)
(Rs. Crores)Transformers 6000.00 Crompton Greaves (Rs. 998.75 crs)
Vijay Electricals (Rs. 987.82 crs)
BHEL (Rs. 611.83 crs)
EMCO (Rs. 542.78 crs)
Areva (Rs. 463.69 crs)
SOURCE: Industry: Market Size and Shares, CMIE, 2008.
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The turnover of the transformerindustry in India is showing a steadyrise in the last few years. India is self-reliant in respect of the resources forprime materials and testing facilities.Manufacturing facility for Cold-RolledGrain Oriented (CRGO) steel,winding conductors, bushings up to420KV class etc. are wellestablished.
Besides catering to the domesticdemand, India is exportingtransformers to over 100 countriescovering USA, Europe, Syria,Malaysia, Singapore, Bangladesh,Oman and China. In the year 2006-07, India’s export of transformersamounted to US $ 645 million, agrowth of 74% over the previousyear.
India is also an importer ofelectric transformers; in the year2006-07, India importedtransformers valued US $ 557million, a growth of 37% over theprevious year. India’s major sourcecountries include China, Germany,USA, Singapore and Japan. Chinaalone accounts for about 40% ofIndia’s total transformer imports.
Switchgear and Control gear
Sector
Switchgears and control gears arerequired for transmission anddistribution of power and arenecessary at every switching pointin power transmission anddistribution system. This sector isfully developed and matured one in
Table 15:INDIA’S EXPORT OF ELECTRIC TRANSFORMERS,
STATIC CONVERTERS AND INDUCTORSHS Code 8504 (2006-07)
Sl No Export Destination Value Share (%)(US $ Million)
World 645.46 100.00
1. USA 192.64 29.85
2. The Netherlands 103.24 15.99
3. Syria 37.62 5.82
4. UK 27.84 4.315. Malaysia 19.51 3.02
6. UAE 18.67 2.89
7. Singapore 18.08 2.80
8. Bangladesh 17.50 2.71
9. Oman 17.45 2.70
10. China 16.74 2.59
SOURCE: Directorate General of Commercial Intelligence and Statistics
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India, producing and supplying awide range of products catering tothe needs of households,commercial and power sector, forentire voltage, ranging from 240 Vto 800 KV. Major players in theswitchgear segment are Siemens,ABB, Crompton Greaves, Arevaand Havells. The switchgearproducts can be broadlycategorised into the following three
groups:
Low Voltage (LV) Switchgear(upto 1000 V) – mainly usedin domestic, power distributionand industrial control system.
Medium Voltage (MV)Switchgear (upto 36KV) – product range mainly include
various types of circuit breakers(below 36KV).
High Voltage (HV) Switchgear – product range includeswitchgears above 36KV, suchas SF6 (Sulphur Hexafluoride)breaker, gas insulatedswitchgear, lighting arrestersand composite insulators.
India has been exporting
switchgears and control gears tovarious countries. In the year 2006-07, India exported switchingapparatus (not exceeding 1000v)valued at US $ 234 million, a growthof 28% over the previous year. Inaddition, India also exportedswitching apparatus (exceeding1000v) worth US $ 90 million in
Table 16:INDIA’S IMPORT OF ELECTRIC TRANSFORMERS,
STATIC CONVERTERS AND INDUCTORSHS Code 8504 (2006-07)
Sl No Export Destination Value Share (%)(US $ Million)
World 557.12 100.00
1. China 219.24 39.35
2. Germany 52.09 9.35
3. USA 40.77 7.31
4. Singapore 24.69 4.43
5. Japan 21.72 3.90
6. Thailand 17.86 3.207. Italy 15.79 2.83
8. Taiwan 14.88 2.67
9. Hong Kong 13.83 2.48
10. South Korea 13.06 2.34
SOURCE: Directorate General of Commercial Intelligence and Statistics
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2006-07, a growth of 34% over theprevious year. Major markets includeUK, USA, Germany, UAE,Philippines, Australia and HongKong.
India is also an importer ofswitchgears and control gears. In theyear 2006-07, India importedswitchgears and control gears (notexceeding 1000v) valued
Table 17:MARKET SIZE AND LEADING PLAYERS IN SWITCHGEAR INDUSTRY
Segments Market Size Leading Players
(2006-07)(Rs. Crores)
Switchgears 6000.00 Siemens (Rs. 936.85 crs)
ABB (Rs. 921.53 crs)
Crompton Greaves (Rs. 872.66 crs)
Areva (Rs. 565.42 crs)
Havells (Rs. 533.74 crs)
SOURCE: Industry: Market Size and Shares, CMIE, 2008.
Table 18:INDIA’S EXPORT OF SWITCHING AND PROTECTING ELECTRICAL
CIRCUITS / APPARATUS (US $ Million in 2006-07)
Sl No Export to Switching Share (%) Switching Share (%)apparatus apparatusnot exceedingexceeding 1000v1000v (HS code(HS code 8535)8536)
World 233.82 100.00 89.57 100.00
1. UK 42.17 18.03 11.23 12.54
2. USA 32.61 13.94 17.90 19.98
3. Germany 18.76 8.02 1.77 1.98
4. UAE 15.94 6.81 6.92 7.72
5. Philippines 7.05 3.01 0.60 0.67
6. Australia 6.57 2.81 1.40 0.42
7. Hong Kong 6.55 2.80 0.31 0.35
8. Saudi Arabia 6.09 2.60 2.24 2.50
9. Nigeria 5.66 2.42 0.46 0.51
10. France 5.64 2.41 2.80 3.12
SOURCE: Directorate General of Commercial Intelligence and Statistics
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US $ 462 million in 2006-07. In thesame year, the import of switchgears(exceeding 1000v) amounted to US$ 51 million.
Capacitors
Capacitors are used for correcting
power factor at the consumer end,to improve the efficiency of thesystem and reducing unwantedloses. LT capacitors, HT capacitors,starting / running capacitors,electrolytic motor starter capacitors,and induction furnace capacitorsare some of the capacitorsmanufactured in India.
Market for capacitors in India isworth more than Rs. 800 crores.The domestic production isestimated to be Rs. 400 crores, ofwhich exports being around Rs.200 crores, while the importdemand was valued at Rs. 600
crores. Some of the firms engagedin capacitor production areTibrewala Electronics, Varroc, ABB,Keltron, and BHEL.
India’s export of electriccapacitors amounted to US $ 39million in 2006-07, witnessing agrowth of 56% over the previousyear. USA is the major market for
Table 19:INDIA’S IMPORT OF SWITCHING AND PROTECTING ELECTRICAL
CIRCUITS / APPARATUS(US $ Million in 2006-07)
Sl No Import from Switching Share (%) Switching Share (%)apparatus apparatusnot exceedingexceeding 1000v1000v (HS code(HS code 8535)8536)
1. Germany 96.23 20.82 11.98 23.61
2. China 64.92 14.05 5.29 10.42
3. USA 21.04 11.05 4.70 9.27
4. France 39.65 8.58 2.35 4.63
5. South Korea 29.98 6.49 1.25 2.46
6. Japan 26.30 5.69 1.15 2.27
7. Singapore 24.65 5.33 1.21 2.39
8. UK 21.64 4.68 1.66 3.27
9. UAE 12.07 2.61 0.40 0.79
10. Switzerland 9.65 2.08 10.54 20.78
SOURCE: Directorate General of Commercial Intelligence and Statistics
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Indian electric capacitors with ashare of 11.6%, followed by Spainand Qatar (10% each), Turkey andUAE (6% each).
India’s import of electriccapacitors is greater than its exports.
In the year 2006-07, India imported
electric capacitors valued US $ 135
million, a growth of 14% over the
previous year. China is the main
source country for India, accounting
for one-fourth of total imports. India’s
Table 20:MARKET SIZE AND LEADING PLAYERS IN CAPACITOR INDUSTRY
Segments Market Size Leading Players(2006-07)
(Rs. Crores)
Capacitors 400 Tibrewala Electronics (Rs. 54.16 crs)
Varroc (Rs. 37.19 crs)
ABB (Rs. 32.38 crs)
Keltron (Rs. 20.44 crs)
BHEL (Rs. 19.71 crs)
SOURCE: Industry: Market Size and Shares, CMIE, 2008.
Table 21:
INDIA’S EXPORT OF ELECTRIC CAPACITORSHS Code 8532 (2006-07)
Sl No Export Destination Value Share (%)(US $ Million)
World 39.48 100.00
1. USA 4.58 11.60
2. Spain 4.01 10.15
3. Qatar 3.86 9.78
4. Turkey 3.50 6.41
5. UAE 2.53 6.006. Brazil 2.37 5.87
7. Portugal 2.32 3.24
8. Germany 1.28 2.96
9. Hong Kong 1.17 2.79
10. Saudi Arabia 1.10 2.71
SOURCE: Directorate General of Commercial Intelligence and Statistics
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other major source countries include:USA (14%), Singapore (13%),
Germany (7%), Taiwan and Japan(5% each).
Motors and Generators
The generator industry has twosegments: portable sets, which run
on kerosene, petrol and diesel; and
stationary sets, which run primarilyon diesel. Large number of players
are engaged in production ofgenerators, particularly in the lower
KVA generator (3 to 15 KVA)segment. This segment is
characterized by simple technology
and hence dominated by the smalland medium enterprises (SMEs).
These SME units are concentrated
mainly in Agra, Rajkot, Kolhapur,
Mumbai and Kolkata. Organizedsector accounts for 33% of total
production. Major brands from thissegment are Kiloskar Electric andCrompton Greaves.
Electric motor segment on theother hand is dominated by theorganized sector, with around 60companies engaged in production.In addition, there are nearly 3000units in the small and medium sector
manufacturing low capacity motors.
Motors and generators markettogether is worth over Rs 5500crores in India. India mainly exportselectric generating sets and rotaryconverters (HS Code 8502), butmainly imports electric motors andgenerators (other than generatingsets) (HS Code 8501).
Table 22:INDIA’S IMPORT OF ELECTRIC CAPACITORS
HS Code 8532 (2006-07)
Sl No Import from Value Share (%)(US $ Million)
World 135.31 100.00
1. China 33.12 24.48
2. USA 18.88 13.95
3. Singapore 17.79 13.14
4. Germany 9.49 7.01
5. Taiwan 7.21 5.32
6. Japan 6.67 4.92
7. South Korea 6.64 4.91
8. Hong Kong 6.62 4.89
9. Czech Republic 5.05 3.73
10. France 2.90 2.14
SOURCE: Directorate General of Commercial Intelligence and Statistics
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In the year 2006-07, India’sexport of electric motors andgenerators (HS Code 8501) wasvalued at US $ 133 million, whereasIndia’s export of electric generatingsets and rotary converters (HS Code8502) amounted to US $ 361 million.USA is the largest market for exportof both the categories. On the other
hand, India’s import of electricgenerating sets (HS Code 8502) wasvalued at US $ 114 million, and theimport of electric motors andgenerators (HS Code 8501) wasvalued at US 244 million. China,Germany, USA and South Korea aremajor importers under both thecategories.
Table 23:MARKET SIZE AND LEADING PLAYERS IN MOTORS AND GENERATORS
Segments Market Size Leading Players
(2006-07)(Rs. Crores)
Motors and Generators 5500 BHEL (Rs. 1354.45 crs)
Crompton Greaves (Rs. 797.36 crs)
Siemens (Rs. 549.66 crs)
Powerica (Rs. 484.39 crs)
Sidhir Gensets (Rs. 398.72 crs)
SOURCE: Industry: Market Size and Shares, CMIE, 2008.
Table 24:INDIA’S EXPORT OF ELECTRIC MOTORS AND GENERATORS
US $ Million (2006-07)
Sl No Export Elec. Share (%) Electric Share (%)Destination Generating motors and
sets generators(HS 8502) (HS 8501)
World 361.43 100.00 133.30 100.00
1. USA 274.95 76.07 51.76 38.82
2. Portugal 14.88 4.11 Neg Neg3. Mali 11.64 3.22 1.49 1.11
4. UAE 6.59 1.82 5.03 3.77
5. Turkey 3.64 1.01 0.76 0.57
6. Japan 3.27 0.90 1.75 1.31
7. Australia 2.55 0.70 0.21 0.16
8. Chad 2.53 0.70 Neg Neg
9. Ghana 2.31 0.64 0.23 0.17
10. Saudi Arabia 2.23 0.62 10.51 7.88
SOURCE: Directorate General of Commercial Intelligence and Statistics
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In sum, the capital goodsindustry in India is witnessingturnaround since the last few years.The index of industrial production forthe capital goods industry iswitnessing an increasing trend since2002-03. Exports by various sub-segments of the capital goodsindustry is also on the increase,especially with regard to machine
Table 25:INDIA’S IMPORT OF ELECTRIC MOTORS AND GENERATORS
US $ Million (2006-07)
Sl No Import from Electric Share (%) Elec. Share (%)motors and Generatinggenerators sets(HS 8501) (HS 8502)
World 244.43 100.00 114.10 100.00
1. China 43.70 17.88 15.63 13.70
2. Germany 38.89 15.91 26.32 23.07
3. USA 21.91 8.96 8.83 7.74
4. South Korea 21.49 8.79 0.12 0.11
5. Italy 15.10 6.18 1.68 1.476. Japan 13.75 5.62 7.35 6.44
7. UK 12.94 5.29 2.82 2.47
8. Finland 9.73 3.98 5.63 4.93
9. Singapore 6.67 2.73 13.60 11.92
10. Switzerland 6.62 2.71 0.20 0.17
SOURCE: Directorate General of Commercial Intelligence and Statistics
tools under the category of non-electrical machinery; andtransformers, switchgears, electricgenerating sets under the electricalmachinery category. India is a netimporter in most of the products, asthe leading players are expandingtheir capacities and the country is onthe manufacturing growth path.
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BACKGROUND
The economic reforms increasedthe competition to Indian industry,both in domestic and foreignmarkets. This resulted intransformation of Indianmanufacturing sector, which hasbeen increasingly seekingtechnological solutions that help thesector in sharpening theircompetitiveness, both in domesticand international markets. At this
juncture, Export-Import Bank ofIndia (Exim Bank) identified Indian
machine tools sector – a sub-segment of Indian capital goodsindustry, and brought a studyidentifying appropriate strategies tostrengthen this sector, and therebyhelp contribute to the growth ofIndian manufacturing sector.
The study on Indian machinetools sector, captured the trends in
global and Indian machine toolssector, analysed the potentialcompetition from countries such asChina and Taiwan, andrecommended an agenda fordevelopment. One suchrecommendation made by the studywas that the Indian Machine ToolsManufacturers Association (IMTMA)
to adopt a cluster approach, seeking
support from United NationsIndustrial Development Organisation
(UNIDO) and the Government ofIndia (the then Department of Small
Scale Industries), to help the
member-firms in overcoming theweaknesses, by adopting best
practices in the industry across theglobe.
NATIONAL PROGRAMME FORDEVELOPMENT OF MACHINETOOL INDUSTRY
Following this recommendation, atthe instance of the industry, aNational Programme forDevelopment of Indian MachineTool Industry (NPDMI) waslaunched in December 2002, as acooperative effort of UNIDO,Government of India, Exim Bankand IMTMA.
Objectives
The objectives of the programmeinclude:
Strengthening the competitiveposition of the Indian machinetool Industry in the globalmarket;
4. EXIM BANK’S SUPPORT TOINDIAN MACHINE TOOLS
SECTOR: CASE STUDY
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Strengthening the technologicaland market developmentcapacity of players of theindustry; and
To achieve high growth in CNCmachine tool production,ushering in an era of e-commerce in machine tooltrade, and establishing ‘Madein India’ label in machine tools.
Steering Committee
A Steering Committee was formed,drawing expertise from variousfields, to guide successfulimplementation of the project. EximBank’s representation in theCommittee significantly contributedto the successful implementation ofthe programme.
Activities
Range of activities was undertakento update the manufacturing andmanagement practices of theplayers in Indian machine toolssector. Evaluation of machine tooltechnology and market trends inUSA and Europe was undertakenthrough surveys. Visit to EMO Milan(a biennial trade show for machine
tools held in Italy) helped theindustry to study the globaltechnological trends in the machinetools sector, and undertake gap-analysis of technology in Indianmachine tools sector. Participationalso helped the players toundertake appropriate technology
improvements in their units.Followed by this was a groupparticipation in BIMU Milan (ItalianMachine Tools Production SystemsShow) by the machine toolmanufacturers under the banner ofIndia – UNIDO. This event alonewas estimated to have generateda business of around US $ 5.5million, representing around 5% ofannual exports of the sector in2002-03.
As a part of the programme,delegations comprising machine toolmanufacturers attended the ChinaInternational Machine Tool Show andCanton Fair (China Import andExport Fair). Technology Survey wasalso conducted during theInternational ManufacturingTechnology Show held at Chicago.
Learning through participation ininternational trade shows weresupplemented with showcasing thecapabilities of Indian machine toolmanufacturers in India. A group offirms were encouraged to participateand showcase their capabilities inNational Manufacturing andTechnology Show. With the objectiveof bringing together the machine tool
manufacturers and their sub-systemsuppliers, a ‘Machine ToolManufacturers and Vendors Meet’was organized during this show. Enduser surveys were also conducted invarious machine tool clusters inIndia. During such interactionsimprovements needed in Indian
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machine tool designs and qualitywere passed on to the vendors. Inaddition, a two-day internationalseminar on ‘Machining Technologies’was organized, focussing onemerging technologies in machiningprocess, and volume production, toanalyse the international trends in themetal-cutting machine tool industry.
To bridge the technology gap,especially in the small and mediumsegment, a series of advancedmachine tool design courses wereorganized at International Centre forAdvancement of ManufacturingTechnology (ICAMT), Bangalore.Such courses helped the industry increating new breed of machine tooltechnologists and improvement inmachine design. In addition, trainingprogrammes on foundrytechnologies and materials
engineering, quality management
systems, precision measurementand calibration equipment, heattreatment, machine tool ergonomicsand aesthetics were also taken placeon a regular basis.
Outcome
It may thus be fair to surmise thatas a result of range of suchactivities, the production and exportof Indian machine tools sector havegone up over the years. ‘Made inIndia’ label of Indian machine tool
sector has gained internationalreputation making the sector morecompetitive in domestic as well asinternational markets.. Ministry ofSmall Scale Industries, Governmentof India selected the machine toolsector as a theme for the FourthSSI Convention, held in the year2003. UNIDO declared this initiative
as a success story.
SOURCE: Exim Research; Data complied from Indian Machine ToolsManufacturers Association and Directorate General of Commercial IntelligenceStatistics, Government of India
Exhibit 16:PRODUCTION AND EXPORT PERFORMANCE OF INDIAN MACHINE
TOOLS SECTOR
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FINANCING SUPPORT
Exim Bank has been closelyassociated with the export efforts
of Indian machine tools sector. TheBank has been supporting themachine tool sector to moderniseand upgrade their productionfacilities, adaptation of technologyand internationally acceptablestandards through its variousfinancing products and services.
Bangalore InternationalExhibition Centre
IMTMA, with the objective ofshowcasing the capabilities ofIndian industry, particularly the
machine tools sector, has set upthe Bangalore InternationalExhibition Centre (BIEC). The focusat BIEC is not only to house theIMTMA’s international machine toolexhibition – IMTEX and otherIMTMA-organised events, but alsoto make available the facilties to theIndian industry for schedulinginternational events. BIEC has setin place a strategic partnership withDeutsche Messe AG – owners ofworld’s one of the largest exhibition
facilities in Hannover, Germany, forinternational marketing. Exim Bank,under its export facilitationprogramme, has supported IMTMAin setting up this exhibition facility.
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As the capital goods industryprovides machinery and equipmentsfor the manufacturing sector,performance of this sector is linkedto the overall growth of the
manufacturing sector. Achievingcompetitiveness in this sector ispossible with continually sustainingthe growth in production andproductivity, market penetration andexpansion, characterized by growthin exports. Thus, in a globalized era,the competitiveness of Indian capitalgoods industry is influenced by notonly the growth in production but alsoby external factors such as worldmarket for capital goods, India’sposition vis-à-vis other majorsuppliers.
Globally the capital goodsindustry is worth around US $ 4.5trillion industry. Germany, and USAare traditionally large suppliers ofdifferent segments of capital goods.
However, of late, Asian countriessuch as China, Taiwan, and SouthKorea have become major playersin production and export of capitalgoods. Consumption of capitalgoods has also increasedsubstantially in these countries dueto the thrust given to themanufacturing sector.
In this chapter, analysis hasbeen carried out to map the globaltrends in import of select capitalgoods, major export destinations forIndian capital goods and potential for
Indian capital goods exporters, toexpand the market share, especiallyin select developing country markets.While there may also beopportunities for market expansionin developed countries such as USAand EU, this study focusses onopportunities available in developingcountry markets, wherein
customization through productdevelopment and pricecompetitiveness would help enhancethe market share of Indian capitalgoods exporters.
NON-ELECTRICALMACHINERY
Machine Tools
Major categories of machine toolsimported in the world includemachine tools for working metal byforging, hammering and die-stamping (HS Code 8462); machinetools for working in the hand,pneumatic or self-contained non-electric motor (HS Code 8467);
5. INDIAN CAPITAL GOODSINDUSTRY: MARKET ANALYSIS
AND EXPORT POTENTIAL
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machining centers and multi stationtransfer machines for working
metals (HS Code 8457); andmachine tools for working wood,cork, bone, hard rubber, hardplastics etc. (HS Code 8465).
Machine tools for working
metal by forging, hammering and die-stamping
(HS Code 8462)
Major importers of machine toolsfor working metal by forging,
hammering and die-stamping (HS
Code 8462) include China, USA,
Germany and France. India is 15th
largest importer in the world with
its import amounting to US $ 275
million in 2006. China’s import
demand has been principally
catered by countries such as Japan
and Taiwan in the Asia region;
Germany is one of the largest
source countries for China’s imports
outside Asia. Germany has beenimporting this category of machine
Table 26:WORLD IMPORT OF SELECT MACHINE TOOLS (US $ Million)
HS Code Description 2005 2006
8462 Machine tools for working metal by 7235.90 8789.42forging, hammering and die-stamping
8467 Tools for working in the hand, pneumaticor with self-contained non-electric motor 6686.53 7918.55
8457 Machining centers and multi stationtransfer machines for working metal 6228.92 7193.36
8465 Machine tools for working wood, cork,bone, hard rubber, hard plastics etc.,. 6147.15 7091.63
8458 Lathes for removing metal 5325.93 5983.42
8460 Machine tools for deburring, sharpening,grinding, honing, lapping, polishing metals 3424.22 3732.78
8464 Machine tools for working stones,ceramics, concrete, asbestos-cement orother mineral materials 3349.85 4271.03
8459 Machine tools for drilling, boring,milling, threading or tapping by removingmetals other than lathes 3049.85 3646.65
8461 Machine tools for planing, shaping,slotting, broaching, gear-cutting,
grinding or finishing, working byremoving metals 1956.53 2393.71
8463 Other machine tools for working metal,sintered metal carbides without removingmaterials 1594.65 1809.02
SOURCE: UN COMTRADE
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tools principally from regionalcountries such as Italy, Switzerland,France and Austria. USA has beenprincipally importing from countriessuch as Germany, Canada, Italyand UK.
India has been exporting thiscategory of machine tools primarilyto Nigeria, UAE and Iran, in additionto developed countries such as USAand Canada. In the year 2005,Nigeria imported machine toolsunder this category valued US $ 9million. India was the principal sourcecountry for imports under thiscategory with around one-thirdshare. Other major source countriesfor Nigeria include developedcountries such as Belgium andGermany. For UAE, India is theeighth largest source country forimport of machine tools under this
category. Though, UAE has beensourcing principally from developedcountries such as Italy, Germany andSpain; China is able to compete with
these developed countries. Indianmachine tool exporters may alsotarget UAE as a potential market forenhancing their market share. Indiais not a significant source country forIran, though Iran is one of the largestmarkets for this category of machinetools. Iran has been principallysourcing from developed countriessuch as Germany, Japan and Italy.Thus, India has potential to enhanceits exports to Iran. In addition, Indianmachine tool exporters should also
target other developing countriessuch as Mexico, Thailand andTurkey, who are major developingcountry importers.
Tools for working in the
hand, pneumatic or with self- contained non-electric motor
(HS Code 8467)
Major importers of machine toolsworking in hand, pneumatic or self-contained non-electric motorcategory include USA, Mexico,
Table 27:MARKET ANALYSIS FOR MACHINE TOOLS UNDER HS CODE 8462
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry Country
Markets Importersfor India in the World
Nigeria Belgium and Germany Mexico USA, Spain and Italy
UAE Italy, Germany and Thailand Japan, Korea andSpain Taiwan
Iran Germany, Japan Turkey Italy, Germany andand Italy Brazil
SOURCE: UN COMTRADE
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Germany and France. India is 15th
largest importer in the world withthe value of imports being US $ 62million in 2006. USA has beenmainly importing from Taiwan,Japan and Germany, while theimport demand of Mexico has beencatered by Japan, Brazil andBelgium. Major source countries forGermany include Belgium, Malaysiaand China.
India’s major markets includeBelgium, USA, UK and Canada.Amongst developing countries,Nigeria, Sri Lanka and Kenya are themajor markets for India. It may benoted that developed countries suchas Singapore, Germany, Italy andUSA are the major source countriesfor import by Nigeria, Sri Lanka andKenya. China and Brazil, which aredeveloping countries, are other
major source countries. Thus, Indiacould endeavor to expand the marketshare in developing countries such
as Nigeria, Sri Lanka and Kenya.
Countries such as Poland,Indonesia and Czech Republic are
leading importers amongstdeveloping countries. However, Indiais not a significant source country forimport of machine tools (HS Code8467) for these countries. Indianmachine tool exporters may alsotarget these developing countriesthrough customized productdevelopment, technologyadaptation, and by offering attractive
price.
Machining centers and multi
station transfer machines for working metal (HS Code 8457)
Major world importers of machiningcenters and multi-station transfermachines for working metal (HSCode 8457) include USA, China,
Germany and Belgium. China hasprincipally imported from countriessuch as Japan, Germany and
Table 28:MARKET ANALYSIS FOR MACHINE TOOLS UNDER HS CODE 8467
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importers
for India in the WorldNigeria Germany, Singapore Poland Germany, USA and
and UK Sweden
Sri Lanka Singapore, China Indonesia Singapore, China andand Italy Canada
Kenya Brazil, Germany and Czech Republic Germany, Italy andUSA Austria
SOURCE: UN COMTRADE
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Taiwan. While the major sourcecountries for import (of machiningcenters and multi-station transfermachines) by Germany are Japan,Switzerland, UK and Belgium; USAhas principally sourced machinetools under this category fromcountries such as Japan, Germanyand Taiwan. Amongst developingcountries, Mexico, Thailand andTurkey are the major importersunder this category of machinetools.
India, in the year 2006-07,exported machine tools under thiscategory worth US $ 3.3 million. Italyis the major market for Indianmachine tools under this category in2006-07. However, amongstdeveloping countries, India has beenexporting mainly to Nigeria, UAE andIsrael. All these developing countries
are mainly importing from developedcountries, and thus offer potential forIndian exporters to enhance themarket share. Taiwan is one of the
leading sources for imports by thesedeveloping countries, and thus is amajor competitor for India’s exports.
Machine tools for working wood, cork, bone, hard
rubber, hard plastics etc.,.(HS Code 8465)
Major world importers of machinetools for working wood, cork, bone,hard rubber, hard plastics (HSCode 8465) include USA, China,Germany and Russia. Poland and
Hong Kong are the leadingdeveloping country exporters ofmachine tools under this category.USA has principally sourced itsimport requirements from Germanyand Italy, whereas, China hassourced its import requirementsfrom Japan, Hong Kong andTaiwan. Germany has mainly
sourced from Austria and Italy.In the year 2006-07, India’s
export of machine tools under thiscategory amounted to US $ 6.6
Table 29:MARKET ANALYSIS FOR MACHINE TOOLS UNDER HS CODE 8457
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry Country
Markets Importersfor India in the World
Nigeria Italy, Germany Mexico Germany, Japan andand Taiwan USA
UAE Italy, Germany and USA Thailand Japan, Taiwan andSingapore
Israel Germany, Taiwan Turkey Taiwan, Germany andand UK Japan
SOURCE: UN COMTRADE
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million. India has mainly exported tocountries such as UAE, USA,Thailand and Sudan. While UAE hasprincipally sourced from countriessuch as Taiwan and Germany, majorsource countries for Thailand includeTaiwan, Japan and Germany. Sudan,though not a significant importer ofmachine tools under this category,has sourced its import requirementsfrom countries such as Austria andTurkey. Indian machine toolsexporters may thus adopt
appropriate product developmentand pricing strategies to enhance themarket share in developing countries,such as UAE and Thailand.
Lathes for removing metal
(HS Code 8458)
Major importers of lathes forremoving metals (HS code 8458)
in the world include USA, Germanyand China. Developing countries(other than China) that are major
importers of machine tools underthis category include Thailand,Turkey and Hong Kong. USA hasprincipally sourced from countriessuch as Japan, Korea andGermany. While Germany hassourced its import requirementsfrom Japan, Italy and Belgium, theimport demand of China has beenprimarily sourced from Japan,Taiwan and Hong Kong.
In the year 2006-07, Indiaexported lathes for removing metals(HS Code 8458) valued US $ 20million. Main markets for India underthis product category include USA,Australia and Bangladesh. Someother developing countries that aremajor export markets for Indianlathes include Brazil and UAE. WhileIndia caters to significant volume ofimport demand of Bangladesh under
this category, there is still space forenhancement of exports. India’scompetitors in Brazil include Japan,
Table 30:MARKET ANALYSIS FOR MACHINE TOOLS UNDER HS CODE 8465
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importers
for India in the World
UAE Taiwan, Germany China Japan, Hong Kongand India and Taiwan
Thailand Taiwan, Japan and Poland Germany, Italy andGermany Austria
Sudan Austria, Turkey and Italy Hong Kong Taiwan, Japan andGermany
SOURCE: UN COMTRADE
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Germany and South Korea. Theimport requirements of UAE, whichis an important market for India, ismet through imports from developedcountries such as Germany and UK.China is the third largest sourcecountry for import of machine toolsunder this category by UAE.
Machine tools for de-burring,
sharpening, grinding, honing,lapping, polishing metals (HS
Code 8460)
Major importers of machine tools(for de-burring, sharpening, honing,lapping and polishing metals) underHS Code 8460 in the world includeChina, USA and Germany. Amongdeveloping countries, Thailand,Turkey and Mexico are majorimporters of machine tools underthis category. India is also one of
the major importers of machinetools under this category. China hasprincipally sourced its requirements
from Japan, Germany and Italy.While USA has mainly importedfrom Japan, Germany andSwitzerland, the requirements aremet in Germany through importsfrom Switzerland, Italy and Sweden.
India, in the year 2006-07,exported machine tools (under HScode 8460) valued US $ 5.5 million,Major developing country markets forIndia include Nigeria, Malaysia andUAE. Nigeria, which is not a majorimporter of machine tools under thiscategory, mainly imported fromSouth Korea, Italy and China.Malaysia, another major developingcountry market for India, importedprincipally from Japan, Singaporeand Taiwan, while UAE sourced itsimport requirements from Japan,Germany and Switzerland. India,thus, has more room for export
expansion in these developingcountries, especially in Malaysia andUAE.
Table 31:MARKET ANALYSIS FOR MACHINE TOOLS UNDER HS CODE 8458
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importers
for India in the World
Bangladesh Japan, Singapore Thailand Japan, Taiwan andand China China
Brazil Japan, Germany and Turkey Taiwan, Japan andSouth Korea Korea
UAE Germany, UK and China Hong Kong Taiwan, Japan andChina
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Machine tools for working stones, ceramics, concrete,asbestos-cement or other
mineral materials
(HS Code 8464)
Major importers of machine toolsfor working stones, ceramics,
concrete, asbestos-cement (HSCode 8464) in the world includeTaiwan, USA and China. Other thanTaiwan and China, the developingcountry importers include Iran andIndia. India, in the year 2006-07,imported machine tools under thiscategory valued US $ 150 million.Taiwan has principally sourced its
import requirements from Japan,USA and South Korea, whereas,China has principally sourced itsrequirements from Japan,Switzerland and Italy. Iran hassourced its requirements from Italy,Germany and Turkey.
India, in the year 2006-07,exported machine tools under this
category worth US $ 3.5 million.Major markets for India under this
category include developingcountries such as Yemen, Egypt and
Oman. Although in small quantity,
India is one of the major exportersof machine tools under this category
to Yemen, Egypt and Oman. India’sprincipal competitors in these
countries include Italy, Egypt and
Jordan.
Machine tools for drilling,
boring, milling, threading or tapping by removing metals
other than lathes (HS Code
8459) Major importers of machine toolsfor drilling, boring, milling, threadingor tapping, by removing metals (HSCode 8459) in the world includeChina, USA and Germany. Selectdeveloping countries that areimporters of machine tools underthis category include Thailand,
Table 32:MARKET ANALYSIS FOR MACHINE TOOLS UNDER HS CODE 8460
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
Thailand Japan, Thailand and Nigeria South Korea, ItalyTaiwan and China
Turkey Germany, Switzerland Malaysia Japan, Singaporeand Italy and Taiwan
Mexico USA, Japan and Italy UAE Japan, Germany andSwitzerland
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Hong Kong and Indonesia. India isalso one of the developing countryimporters of machine tools underthis category. In the year 2006-07,India’s imports were valued at US$ 147 million. China has principallysourced its import requirements
under this category from Japan,Germany and Taiwan. Thailand andHong Kong have principallysourced from countries such asJapan, Taiwan, Singapore andChina.
In the year 2006-07, Indiaexported machine tools, under thiscategory, valued US $ 14.9 million.
Ukraine, Thailand and UAE aremajor markets for Indian machinetools under this category. While Indiais largest source country for importsby UAE, Ukraine has been principallyimporting its requirements fromneighboring countries such asRussia, Belarus and Germany.Thailand, on the other hand, hasimported mainly from Japan, Taiwan
and Singapore. Thus, Indianmachine tool exporters mayconcentrate in the markets ofUkraine and Thailand for expansionof market share.
Machine tools for planing,
shaping, slotting, broaching,gear-cutting, grinding or
finishing, working by removing metals (HS Code
8461)
Major importers of machine toolsfor planing, shaping, slotting,broaching, gear-cutting, grinding orfinishing by removing metals (HS
Code 8461) in the world are USA,China, Germany and Japan.Among the developing countries,India, Poland, Thailand andIndonesia are the leading importers.In the year 2006-07, India importedmachine tools under this categoryvalued US $ 137 million. China,Poland and Thailand haveprincipally imported from countries
Table 33:MARKET ANALYSIS FOR MACHINE TOOLS UNDER HS CODE 8464
Existing Major Major Major Major
Developing competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
Yemen Italy, Jordan and China Taiwan Japan, USA andSouth Korea
Egypt Italy, Japan and Belgium China Japan, Switzerlandand Italy
Oman Italy and Spain Iran Italy, Germany andTurkey
SOURCE: UN COMTRADE
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such as Japan, Germany, Taiwan,Italy and Singapore.
In the year 2006-07, Indiaexported machine tools under thiscategory valued US $ 6.6 million.Major markets for India’s exportsinclude USA, UAE, Germany,
Turkey, UK and Sudan. Though UAEis one of the largest market for Indiafor machine tools under thiscategory, the country has met itsrequirements through imports from
Italy, China and USA. Similar is the
case with regard to Turkey and
Sudan, other major developing
country markets for Indian machine
tools. These two countries have
sourced their import requirements
from Germany, Italy, USA and
Taiwan. Indian machine toolexporters have to formulate
appropriate strategies to enhance
their market presence in these
developing countries.
Table 34:MARKET ANALYSIS FOR MACHINE TOOLS UNDER HS CODE 8459
Existing Major Major Major Major
Developing competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
Ukraine Russia, Belarus and China Japan, Germany andGermany Taiwan
Thailand Japan, Taiwan and Thailand Japan, Taiwan andSingapore Singapore
UAE UK, Germany and Hong Kong Japan,China Taiwan and China
SOURCE: UN COMTRADE
Table 35:MARKET ANALYSIS FOR MACHINE TOOLS UNDER HS CODE 8461
Existing Major Major Major MajorDeveloping competitors Developing Competitors
Country CountryMarkets Importersfor India in the World
UAE Italy, China and USA China Japan, Germany andTaiwan
Turkey Germany, Italy and USA Poland Japan, Germany andItaly
Sudan Italy, Turkey and Taiwan Thailand Japan, Taiwan andSingapore
SOURCE: UN COMTRADE
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Textile Machinery
Major categories of textilemachinery imported in the world
include general purpose washingmachines (HS Code 8450);machinery for washing, drying,wringing, ironing, pressing andbleaching (HS Code 8451);auxiliary machinery such asdobbies and jacquards (HS Code8448); machines for preparingtextile fibres, spinning and twisting(HS Code 8445); knitting and
embroidery machines (HS Code8447), and weaving machines (HSCode 8446).
Washing machines
(HS code 8450)
Major importers of washing
machines in the world include USA,Russia, UK and Germany. Amongdeveloping countries, principalimporters include Ukraine, Polandand Mexico. Though India is not asignificant importer of this item, inthe year 2006-07, India importedwashing machines valued US $ 34million. Major source countries forUkraine, Poland and Mexico are
Italy, China, Slovakia and SouthKorea.
Table 36:WORLD IMPORT OF SELECT TEXTILE MACHINERY
(US $ Million)
HS Code Description 2005 2006
8450 Washing machines 10621.89 10808.178451 Machinery for washing, drying, wringing,
ironing, pressing, bleaching, dyeing,dressing and finishing 5521.33 5781.94
8448 Auxiliary machinery such as dobbies, jacquards etc 4310.48 4364.64
8445 Machines for preparing textile fibres,spinning, twisting and other yarnmaking machinery 3139.69 3551.21
8447 Knitting / stitch-bonding machines,
and other machines for making laces,embroidery and trimmings 3120.17 3537.48
8446 Weaving machines (looms) 1563.5 2266.15
8449 Machinery for manufacture of finishingfelts or non-wovens 586.38 560.30
8444 Machines for extruding, drawing, texturingor cutting man-made textile materials 541.63 635.10
SOURCE: UN COMTRADE
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In the year 2006-07, Indiaexported washing machines valuedUS $ 7.3 million. Major markets forIndian washing machines includeUSA, Australia and UAE. Developingcountries such as Chile and SriLanka were also major markets forIndian washing machines, thoughnot very significant. India’s majordeveloping country markets such asUAE, Chile and Sri Lanka havesourced its import requirements frommostly developing countries such as
China, Thailand, South Korea andBrazil. Indian exporters have thusroom for market expansion in thesecountries which could be achievedthrough greater emphasis oninnovation and product development.
Machinery for washing,drying, wringing, ironing,pressing, bleaching, dyeing,
dressing and finishing (HS code 8451)
Major importers of textile machineryfor washing, drying, wringing,
ironing, pressing, bleaching, dyeing,dressing and finishing in the worldare USA, China and Germany.Major developing countries that areimporting machineries under thisheading include Turkey, Hong Kongand Pakistan. India is also one ofthe significant importers ofmachineries under this category. Inthe year 2006-07, India importedmachineries valued at US $ 248million. Developing countries suchas Turkey, Hong Kong and
Pakistan have mainly imported theirmachinery requirements fromcountries such as Germany, Italy,USA and China.
In the year 2006-07, India’sexport of textile machineries underthis category amounted to US $ 9.3million. Major markets for Indiainclude USA, Egypt, Indonesia and
Bangladesh. Developing countriessuch as Egypt, Indonesia andBangladesh imported principallyfrom countries such as Italy,Germany, Taiwan, South Korea and
Table 37:MARKET ANALYSIS FOR TEXTILE MACHINERY UNDER HS CODE 8450
Existing Major Major Major MajorDeveloping competitors Developing Competitors
Country CountryMarkets Importersfor India in the World
UAE China, Thailand and Ukraine Italy, China andSouth Korea Poland
Chile China, Thailand and Poland Italy, SlovakiaBrazil and Germany
Sri Lanka China, Thailand and Mexico USA, South KoreaSingapore and China
SOURCE: UN COMTRADE
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China. Indian exporters, throughproduct and technologydevelopment, could enhance theirexport opportunities in suchdeveloping country markets.
Auxiliary machinery such as
dobbies, jacquards etc (HS Code 8448)
Major importers of auxiliary textilemachinery in the world includeChina, USA and Italy. Some of themajor developing country importersinclude Turkey, Hong Kong andTaiwan. India is also one of themajor developing country importers
of auxiliary textile machinery in theworld. In the year 2006-07, Indiaimported auxiliary machinery worthUS $ 241 million. Main sourcecountries for Turkey, Hong Kongand Taiwan are European countries
such as Germany, France, Belgiumand Italy. Asian countries such asJapan and Singapore were alsomajor suppliers of auxiliary textilemachinery to these countries.
India’s export of auxiliary textilemachinery in the year 2006-07
amounted to US $ 61.3 million. Majordeveloping country markets for Indiainclude Indonesia, China andBangladesh. In addition, India hasalso exported to developed countrymarkets such as Germany and USA.Close competitors for India in thesedeveloping countries include Japan,Germany, Switzerland, Italy, China
and Taiwan. Indian exporters shouldthus undertake customized productdevelopment to cater to the marketrequirements and be pricecompetitive to enhance market sharein these countries.
Table 38:MARKET ANALYSIS FOR TEXTILE MACHINERY UNDER HS CODE 8451
Existing Major Major Major Major
Developing competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
Egypt Italy, Germany and Turkey Germany, Italy andJapan USA
Indonesia Germany, Taiwan and Hong Kong China, Germany andChina USA
Bangladesh Germany, South Korea Pakistan Germany, Italy andand Taiwan USA
SOURCE: UN COMTRADE
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Machines for preparing textile fibres, spinning, twisting and
other yarn making machinery (HS Code 8445)
Importing of spinning and yarnmaking textile machinery in theworld is dominated by developing
countries. These include China,Pakistan, Turkey and Bangladesh.India is third largest importer ofspinning / yarn making machineryin the world, the import value beingUS $ 841 million in 2006-07. China,Pakistan and Turkey, the largestimporters in the world haveprincipally sourced their import
requirements from countries suchas Germany, Japan, Switzerland,Italy and USA.
India is also an exporter ofspinning and yarn making machines,with the export value being US $ 18million in 2006-07. India’s exportswere mainly destined to Chad,Bangladesh and Indonesia. In the
year 2006-07, India exported
spinning / yarn making machineryworth US $ 4 million to Chad alone,and stood as the single largestsupplier. Both Bangladesh and Indiahave been sourcing their importrequirements from China, in additionto Germany, Japan and Switzerland.
Knitting / stitch-bonding machines, and other
machines for making laces,embroidery and trimmings
(HS Code 8447)
Major importers of knitting / switch-bonding machines in the world aredeveloping countries such asChina, Hong Kong, and Turkey.India is also one of the leadingimporters of knitting and switch-bonding machines in the world. Inthe year 2006-07, India importedtextile machinery, under thiscategory, valued US $ 389 million.China, Germany, Japan, SouthKorea and Taiwan are the leadingsuppliers to these developing
country importers.
Table 39:MARKET ANALYSIS FOR TEXTILE MACHINERY UNDER HS CODE 8448
Existing Major Major Major Major
Developing competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
Indonesia Japan, Switzerland, Turkey Germany, France andand Germany Belgium
China Germany, Japan and Hong Kong Germany, Japan andItaly Italy
Bangladesh Switzerland, China and Taiwan Singapore, Japan andTaiwan Germany
SOURCE: UN COMTRADE
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India’s export of knitting and
stitch-bonding machines in the year
2006-07 was valued at US $ 3million. Machinery under this
category has been mainly exported
to Hong Kong; other developing
country markets include Turkey and
China. These countries have
principally sourced from developed
countries such as Germany, Japan
and Italy.
Weaving machines (looms) (HS Code 8446)
Major importers of weavingmachines in the world aredeveloping countries, such asChina, India, Turkey and Pakistan.India is the second largest importerof weaving machines in the world,next to China, with the import valueamounting to US $ 278 million in2006-07. Japan, Italy, USA,
Table 40:MARKET ANALYSIS FOR TEXTILE MACHINERY UNDER HS CODE 8445
Existing Major Major Major Major
Developing competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
Chad Germany China Japan, Italy and USA
Bangladesh Germany, China and Pakistan Japan, Germany andSwitzerland China
Indonesia Japan, China and Turkey Germany, SwitzerlandGermany and Italy
SOURCE: UN COMTRADE
Table 41:MARKET ANALYSIS FOR TEXTILE MACHINERY UNDER HS CODE 8447
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
Hong Kong Germany, China and Bangladesh Taiwan, China and
Italy GermanyTurkey Italy, Japan and Pakistan Japan, South Korea
Germany and China
China Germany, Japan and Thailand Germany, Japan andItaly China
SOURCE: UN COMTRADE
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Germany and Switzerland areleading suppliers of weavingmachines to these importingcountries.
India also exported weavingmachines to the tune of US $ 5.4million in 2006-07. Major exportmarkets for India include Thailand,UAE and Vietnam. The competitorsfor India in these markets are mainlydeveloped countries such as Japan,Germany, Switzerland, USA andItaly. In UAE, Pakistan is one of theleading suppliers of weavingmachines.
Construction and MiningMachinery
Major categories of constructionand mining machinery imported inthe world include: Self propelledbulldozers, singledozers, graders,
levelers, scrapers, mechanicalshovels, excavators, and roadrollers (HS Code 8429); Otherlifting, handling, loading or
unloading machinery (e.g. lifts,
conveyors, escalators) (HS Code8428); Fork-lift trucks, other trucks
fitted with lifting or handling
equipments (HS Code 8427); Shipsderricks, cranes, mobile lifting
frames, straddle carriers (HS Code8426); Other moving, grading,
leveling, scrapping, excavating,compacting equipments (HS Code
8430); and Pulley tackle and hoists
other than skip hoists, winches and jacks (HS Code 8425).
Self propelled bulldozers,single-dozers, graders,
levelers, scrapers, mechanical shovels, excavators, and road
rollers (HS Code 8429)
Major importers of self-propelledbulldozers, single-dozers, graders,levelers, scrapers, mechanicalshovels and road rollers (HS Code8429) in the world are USA,Canada, France and Italy. Amongstdeveloping countries, the major
Table 42:MARKET ANALYSIS FOR TEXTILE MACHINERY UNDER HS CODE 8446
Existing Major Major Major MajorDeveloping competitors Developing Competitors
Country CountryMarkets Importersfor India in the World
Thailand Japan, Germany and China Japan, Italy andSwitzerland Hong Kong
UAE Switzerland, USA and Turkey Italy, Switzerland andPakistan Germany
Vietnam Japan, USA and Italy Pakistan Japan, USA and Italy
SOURCE: UN COMTRADE
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importers are China, Indonesia,Turkey and Mexico. India hasimported construction machineryunder this category to the tune ofUS $ 283 million in the year 2006-07. Major developing countryimporters have principally sourcedtheir requirements from Japan,South Korea, Germany and UK.
India’s export of constructionmachinery under the category (HSCode 8429) amounted to US $ 27million. Major export markets forIndia include Singapore, Tunisia, SriLanka and Togo. These countrieshave principally sourced their importrequirements from countries such asBelgium, Japan, UK, France, SouthKorea and China.
Other lifting, handling,loading or unloading
machinery (e.g. lifts,conveyors, escalators)
(HS Code 8428)
Major importers of lifting, handling,
loading or unloading machinery(under HS Code 8428) in the world
are USA, Germany, China and UK.
Amongst developing countries, themajor importers include Taiwan,
Mexico and UAE. India is also oneof the major developing-country-
importers of construction machineryunder this category, and imported
worth US $ 343 million in 2006-07.
India’s export of constructionmachinery under this category
Table 43:WORLD IMPORT OF SELECT CONSTRUCTION AND MINING MACHINERY
(US $ Million)
HS Code Description 2005 20068429 Self propelled bulldozers, single-dozers, 29976.90 39109.45
graders, levelers, scrapers, mechanicalshovels, excavators, and road rollers
8428 Other lifting, handling, loading or 14718.39 18109.77unloading machinery(e.g. lifts, conveyors, escalators)
8427 Fork-lift trucks, other trucks fitted with 11208.56 11711.07lifting or handling equipments
8426 Derricks, cranes, mobile lifting frames, 7981.73 10593.10straddle carriers
8430 Other moving, grading, leveling, 6420.98 8947.39scrapping, excavating,compacting equipments
8425 Pulley tackle and hoists other than 3504.87 4223.10skip hoists, winches and jacks
SOURCE: UN COMTRADE
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amounted to US $ 27 million in2006-07. Major markets for Indiainclude Belgium, Kenya,Netherlands, USA and UAE. Thedeveloping country markets such asKenya, UAE and Turkey are mainly
importing from Germany, Italy,Japan, China and Thailand. India isthe second largest source country forKenya; however, with regard toexport to UAE and Turkey, India’sranking is not significant.
Table 44:MARKET ANALYSIS FOR CONSTRUCTION AND
MINING MACHINERY UNDER HS CODE 8429
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
Tunisia Belgium, South Korea China Hong Kong, Japanand UK and South Korea
Sri Lanka Japan, UK and Indonesia Japan, SingaporeChina and Germany
Togo China, France and Turkey Japan, South KoreaBelgium and UK
SOURCE: UN COMTRADE
Table 45:MARKET ANALYSIS FOR CONSTRUCTION AND MINING MACHINERY
UNDER HS CODE 8428
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
Kenya Germany, South Africa China Japan, Germany,
and China TaiwanUAE Germany, China and Taiwan Japan, Germany and
Thailand USA
Turkey Germany, Italy and Mexico USA, Spain and ItalyJapan
SOURCE: UN COMTRADE
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Fork-lift trucks, other trucks
fitted with lifting or handling equipments (HS Code 8427)
Major importers of fork-lifts or othertrucks fitted with lifting / handlingequipments (HS Code 8427)include USA, France, UK andGermany. Among developingcountries, China, Poland, Mexicoand South Africa are leadingimporters. India is also an importer,and its import in 2006-07 wasamounting to US $ 34 million.
These developing countries havemainly sourced their importrequirements from developedcountries such as Japan, UK, USA,France and the Netherlands.
India exported construction andmining machinery, under thiscategory, valued US $ 6.8 million in2006-07. While the products underthis category have also beenexported to developed countries like
UK and USA, developing countriessuch as Tanzania, Chad and UAEwere prominent markets for India’stotal exports under this category.However, these countries have beenimporting from developed countriessuch as UK, Italy, USA, Netherlandsand Japan.
Derricks, cranes, mobile lifting frames, straddle
carriers (HS Code 8426)
Major importers of derricks, cranes,straddle carriers, mobile lifting
frames, under HS Code 8426, inthe world are USA, Belgium, UAE
and France. Developing countries
that are major importers under thiscategory include Hong Kong, China
and Brazil. India’s import under thiscategory in 2006-07 was US $ 266
million. Major source countries forHong Kong, China and Brazil
Table 46:MARKET ANALYSIS FOR CONSTRUCTION AND
MINING MACHINERY UNDERHS CODE 8427
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry Country
Markets Importersfor India in the World
Tanzania Netherlands, UK and China Japan, Hong KongItaly and Italy
Chad USA Poland UK, France andNetherlands
UAE Japan, UK, Mexico USA, UK and Japanand Netherlands
SOURCE: UN COMTRADE
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include developed countries suchas Japan, Norway and Sweden.China has been one of the principalsuppliers to Hong Kong and Brazil.
India’s export of derricks,cranes, straddle carriers, mobilelifting frames in the year 2006-07was valued at US $ 18 million. Majorexport destinations for India underthis category are developingcountries such as UAE, Oman, Iranand Nigeria. Other than developedcountries such as Japan, Italy andGermany, China has also been oneof the major source countries for
UAE, Oman and Iran.
Other moving, grading,leveling, scrapping,
excavating, compacting equipments (HS Code 8430)
Major importers of construction andmining equipments under thecategory, HS Code 8430, in the
world are USA, Spain, Russia and
Canada. Developing countries thatare major importers under thiscategory are China, Angola andUAE. India is also one of the majorimporters amongst developingcountries under this category, with
import value of US $ 285 million in2006-07. Major source countries forimport by China, Angola andKazakhstan are Germany, USA,Italy and Finland. While SouthAfrica is one of the major sourcecountries for Angola; China is oneof the major source countries forKazakhstan.
India’s export under thiscategory, in 2006-07, was valued atUS $ 44 million. Major markets forIndia include developed countriessuch as Singapore, Australia andUSA, and developing countries suchas UAE, Togo and Qatar. Thesecountries have principally sourcedfrom developed countries such asItaly, Germany, France and the
Netherlands. China is one of the
Table 47:MARKET ANALYSIS FOR CONSTRUCTION
AND MINING MACHINERY UNDERHS CODE 8426
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
UAE China, Japan and Hong Kong China, Japan andIreland Sweden
Oman China, Italy and Japan China Germany, Japan andMalaysia
Iran China, Germany and Brazil Norway, China andItaly Sweden
SOURCE: UN COMTRADE
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principal source countries amongdeveloping countries.
Pulley tackle and hoists other
than skip hoists, winches and
jacks (HS Code 8425)
Major importers of pulley tackle andhoists (HS Code 8425) in the worldare USA, Germany, Canada and
France. Amongst developing
countries, major importers include
China, Indonesia and UAE. These
countries have principally sourced
from Japan, Singapore, China,
Germany and USA. India’s import
of pulley tackle and hoists in theyear 2006-07 was valued at US $24 million.
Table 48:MARKET ANALYSIS FOR CONSTRUCTION
AND MINING MACHINERY UNDERHS CODE 8430
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
UAE Italy, Germany and China Germany, USA andChina Japan
Togo France, Netherlands Angola USA, South Africa andand Spain Italy
Qatar Italy, France and Kazakhstan China, Finland andNetherlands Germany
SOURCE: UN COMTRADE
Table 49:MARKET ANALYSIS FOR CONSTRUCTION
AND MINING MACHINERY UNDERHS CODE 8425
Existing Major Major Major MajorDeveloping competitors Developing Competitors
Country CountryMarkets Importersfor India in the World
UAE China, Germany and China Japan, South KoreaJapan and Singapore
Mauritius France, South Africa Indonesia Singapore, Japan andand Italy China
Kuwait USA, Netherlands Mexico USA, China andand Qatar Germany
SOURCE: UN COMTRADE
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India’s export of pulley tackleand hoists in the year 2006-07 wasvalued at US $ 7 million. Majormarkets for India’s exports under thiscategory include developedcountries such as USA, Germanyand Singapore, and developingcountries such as UAE, Mauritiusand Kuwait. While UAE hasprincipally sourced from China,Germany and Japan, sourcecountries for Mauritius were France,South Africa and Italy. Kuwait has
principally sourced from countriessuch as USA, Netherlands and Qatar.
Process Plant Machinery
Major categories of process plantmachinery imported in the worldinclude: Centrifuges, includingcentrifugal dryers, filtering orpurifying machinery and apparatus
(HS Code 8421); Refrigerators,freezers and other refrigerating orfreezing equipment (other than airconditioners) (HS Code 8418);Machinery, plant or lab equipmentfor treatment of materials througha process involving temperature(HS Code 8419); Machinery notspecified elsewhere but used inpreparation or manufacture of food
or drink (HS Code 8438); Centralheating boilers other than thoseheading 8402 (HS Code 8403);Metal rolling mills and rolls thereof(HS Code 8455); Industrial orlaboratory furnaces and ovens,including incinerators (HS Code8417); Steam or other vapourgenerating boilers (HS Code 8402);
Convertors, ladles, ingot mouldsand casting machines used inmetallurgy or metal foundries (HSCode 8454); Furnace burners forliquid fuel, mechanical stokers,including their mechanical graters,ash discharges etc. (HS Code(8416); Calendaring or other rollingmachines other than for metals orglass (HS Code 8420); Auxiliaryplant for use with boilers of heating(HS Code 8404); Hydraulicturbines, water wheels (HS Code
8410); and Presses, crushers andsimilar machinery used inmanufacture of wine, cider or fruit
juices (HS Code 8435).
Centrifuges, including
centrifugal dryers, filtering or purifying machinery and
apparatus (HS Code 8421)
Major importers of process plantmachinery under HS code 8421 inthe world are USA, Germany,France and Canada. Amongdeveloping countries, China,Mexico and Taiwan are the leadingimporters. Major source countriesfor these developing countriesinclude Germany, Japan, USA and
Italy. India imported US $ 343million worth of process plantmachinery under this category inthe year 2006-07.
India’s export under thiscategory during the same year wasvalued US $ 116 million. USA, Italyand Germany are leading developedcountry markets for India’s exports.
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Table 50:World Import of Select Process Plant Machinery
(US $ Million)
HS Code Description 2005 20068421 Centrifuges, including centrifugal dryers, 27264.48 33880.62
filtering or purifying machinery andapparatus
8418 Refrigerators, freezers and other 25286.32 30712.24refrigerating or freezing equipment(other than air conditioners)
8419 Machinery, plant or lab equipment for 21731.81 25650.96treatment of materials through a
process involving temperature8438 Machinery not specified elsewhere but 7762.71 8149.26
used in preparation or manufactureof food or drink
8403 Central heating boilers other than 4614.04 5622.85those heading 8402
8455 Metal rolling mills and rolls thereof 3876.29 5022.34
8417 Industrial or laboratory furnaces and 3185.45 3864.04ovens, including incinerators
8402 Steam or other vapour generating boilers 2835.84 2503.21
8454 Convertors, ladles, ingot moulds and 2519.18 2991.45casting machines used in metallurgy ormetal foundries
8416 Furnace burners for liquid fuel, 1839.80 2060.87mechanical stokers, including theirmechanical graters, ash discharges etc.
8420 Calendaring or other rolling machines 1056.65 957.57other than for metals or glass
8404 Auxiliary plant for use with boilers 922.45 1014.43
of heating8410 Hydraulic turbines, water wheels 792.22 889.32
8435 Presses, crushers and similar machinery 314.48 300.02used in manufacture of wine, cider orfruit juices
SOURCE: UN COMTRADE
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Amongst developing countries, UAE,
Saudi Arabia, China, and Thailand
are leading importers for India under
this product category. USA,
Germany and Japan are leading
suppliers to these developing
countries.
Refrigerators, freezers and other refrigerating or freezing equipment (other than air
conditioners) (HS Code 8418)
Major importers of refrigerating andfreezing equipments (HS Code
8418) in the world are USA,
Germany, France and UK. Amongst
developing countries, China,
Mexico and Ukraine are the leading
importers. In the year 2006-07,
India imported equipments under
this category to the tune of US $
176 million. China has mainlyimported from regional suppliers
such as Singapore, Japan and
Hong Kong. While, Mexico hasmainly sourced from USA, othersources for import of process plantsunder this category include Asian
countries such as China and SouthKorea. Ukraine has principallysourced from regional supplierssuch as Russia and Belarus, inaddition to sourcing from Asiansupplier, South Korea.
India also exported refrigeratingand freezing equipments, with theexport value being US $ 93 million
in 2006-07. Major markets for Indianrefrigerating and freezingequipments include UAE, Sri Lanka,USA and Saudi Arabia. India is thelargest source country for Sri Lankaunder this product category. Othermajor suppliers to Sri Lanka includeIndonesia, Singapore and Thailand.UAE and Saudi Arabia have sourcedtheir import requirements, under thisproduct category, from USA, SouthKorea and China.
Table 51:MARKET ANALYSIS FOR PROCESS PLANT MACHINERY
UNDER HS CODE 8421
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
UAE USA, Germany and China Germany, Japan andJapan USA
Saudi Arabia USA, Germany and Italy Mexico USA, Germany andItaly
Thailand Japan, USA and Taiwan Japan, USA andGermany Germany
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Machinery, plant or lab equipment for treatment of
materials through a process involving temperature
(HS Code 8419)
Major markets for process
equipments under HS Code 8419in the world include USA andGermany. Developing countries thatare major importers of processequipments under this categoryinclude China, Taiwan and Mexico.These countries have principallyimported from USA, Germany andItaly. India is also one of the majordeveloping country importers of
process equipments. In the year2006-07, India imported processequipments under this categoryvalued US $ 293 million.
India’s export of processequipments under HS Code 8419amounted to US $ 257 million in2006-07. Major markets for India’s
imports include China, UAE, Oman,
UK and Saudi Arabia. India is fourth
largest supplier to Oman. Italy,
Germany and South Korea are the
leading source countries for UAE,
Oman and Saudi Arabia.
Machinery not specified elsewhere but used in
preparation or manufacture of food or drink (HS Code 8438)
Major importers of food/beveragesprocessing machinery under the HSCode 8438 in the world are USA,Russia, Germany and UK. Among
developing countries, majorimporters of food / beveragesprocessing machinery includeChina, Poland, Mexico and Chile.These developing countries havebeen principally importing fromdeveloped countries such as USA,Germany, Italy, Japan, Netherlandsand Denmark. India imported food
Table 52:MARKET ANALYSIS FOR PROCESS PLANT MACHINERY
UNDER HS CODE 8418
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
UAE USA, South Korea China Singapore, Japan andand China Hong Kong
Sri Lanka Indonesia, Singapore Mexico USA, Korea andand Thailand China
Saudi Arabia Thailand, South Korea Ukraine Russia, Belarus, andand USA South Korea
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/ beverages processing machinery,under HS Code 8438, to the tuneof US $ 61 million in 2006-07.
India’s export of food / beverages processing machinery,under HS code 8438, was valued US
$ 37 million. Major markets for Indiainclude Kenya, Uganda and Sri
Lanka. India is the largest sourcecountry for import of food / beverages processing machinery forUganda and Sri Lanka, and secondlargest source country for import byKenya. Other major source countriesinclude Germany, Netherlands,Japan, UK and Denmark.
Table 53:MARKET ANALYSIS FOR PROCESS PLANT MACHINERY UNDER
HS CODE 8419
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
UAE Italy, Germany and China Germany, Japan andFrance Taiwan
Oman South Korea, Italy Taiwan Japan, USA andand Germany Germany
Saudi Arabia Italy, Germany and Mexico USA, Germany andSouth Korea Italy
SOURCE: UN COMTRADE
Table 54:MARKET ANALYSIS FOR PROCESS PLANT MACHINERY UNDER
HS CODE 8438
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importers
for India in the WorldKenya UK, Denmark and China Germany, Japan and
Netherlands Netherlands
Uganda Iceland, UK and Poland Germany, Italy andGermany Denmark
Sri Lanka Germany, Japan and Mexico USA, Germany andNetherlands Italy
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Central heating boilers other
than those heading 8402 (HS Code 8403)
Major importers of heating boilers(HS Code 8403) in the worldinclude UK, Germany, Italy andFrance. Among developingcountries, major importers are:Turkey, Poland and Romania.These developing countries haveprimarily sourced their importrequirements from countries suchas Germany, Italy, France and
Hungary. India’s import of heatingboilers under this category wasvalued at US $ 2 million in 2006-07.
India’s export of heating boilers(HS Code 8403) amounted to US $12 million in 2006-07. Major marketsfor India include Kenya, Chile, UKand Vietnam. India is the largest
source country for Kenya and thirdlargest source country for Vietnam.
Kenya has also sourced its import
requirements from countries such as
Israel, South Africa and UK, while
Chile has sourced from Italy, Belgium
and Switzerland. Other major source
countries for Vietnam are Korea,
Thailand and Japan.
Metal rolling mills and rolls thereof (HS Code 8455)
Major importers of metal rollingmills (HS Code 8455) in the world
include China, USA, Russia, SaudiArabia and Iran. The developingcountries have principally importedfrom developed countries such asGermany, Italy, Spain and Japan.Turkey has served as one of themajor suppliers to Saudi Arabia,while Malaysia has catered suppliesto import by Iran. India importedmetal rolling mills (HS Code 8455)worth US $ 244 million, in 2006-07.
Table 55:MARKET ANALYSIS FOR PROCESS PLANT MACHINERY UNDER
HS CODE 8403
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importers
for India in the World
Kenya Israel, South Africa Turkey Germany, Italy andand UK France
Chile Italy, Belgium and Poland Germany, Italy andSwitzerland France
Vietnam Korea, Thailand and Romania Italy, Germany andJapan Hungary
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India’s export of metal rollingmills (HS Code 8455) in the year2006-07 amounted to US $ 105million. Major markets for India’sexports include China, Columbia,UAE, Iran and Vietnam. India is the
largest supplier of this product groupto UAE, and fourth largest supplierto Vietnam.
Industrial or laboratory furnaces and ovens, including
incinerators (HS Code 8417)
Major importers of industrial orlaboratory furnaces and ovens in
the world (HS Code 8417) includeChina, USA, Russia, Germany,Brazil and Taiwan. China hassourced from Belgium, Germanyand Japan; China also served asmajor source country for Brazil.Germany is one of the largestsource countries for China andTaiwan under this product group.
India imported laboratory furnacesand ovens valued US $ 127 millionin 2006-07.
India’s exports, under thisproduct group, in the year 2006-07,amounted to US $ 29 million. Indiaexported mainly to South Africa,UAE, Iran and Qatar. Thesecountries have principally importedfrom developed countries such asGermany, Italy, USA, France andSpain. China and India are thesecond and third largest sourcecountries for import by UAE, underthis product category.
Steam or other vapour
generating boilers (HS Code 8402)
Major importers of steam or othervapour generating boilers in theworld (HS Code 8402) are USA,Thailand, China, South Korea and
Table 56:MARKET ANALYSIS FOR PROCESS PLANT MACHINERY UNDER
HS CODE 8455
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
Columbia USA, Brazil and Sweden China Japan, Germany andItaly
UAE Italy, China and Taiwan Saudi Arabia Italy, Germany andTurkey
Vietnam China, Italy and Japan Iran Italy, Spain andMalaysia
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Indonesia. The developingcountries such as Thailand andIndonesia have sourced thisproduct primarily from Japan andChina; whereas China has sourcedits requirements through importsfrom Japan, Taiwan and Denmark.
India imported US $ 20 millionworth of steam or other vaporgenerating boilers in 2006-07.
India has also exported steamor vapour generating boilers; theexports in value terms stood ataround US $ 75 million in 2006-07.Major markets for India include westAsian countries such as UAE, Oman,Saudi Arabia and Kuwait. These
countries have principally sourcedtheir import requirements fromdeveloped countries such as UK,
Table 57:MARKET ANALYSIS FOR PROCESS PLANT MACHINERY UNDER
HS CODE 8417
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
South Africa USA, Germany China Belgium, Germanyand Italy and Japan
UAE France, China Brazil China, Luxemburgand Italy and Italy
Iran Germany, Italy and Taiwan Japan, Germany andSpain Austria
SOURCE: UN COMTRADE
Table 58:MARKET ANALYSIS FOR PROCESS PLANT MACHINERY UNDER
HS CODE 8402
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry Country
Markets Importersfor India in the World
UAE Italy, UK, and Spain Thailand Japan, China andTaiwan
Oman South Korea, USA China Japan, Taiwan andand Denmark Denmark
Saudi Arabia USA, UK and Japan Indonesia China, Japan andMalaysia
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USA, Japan, Italy, Spain andDenmark. India served as fourth andfifth largest source country for importof steam or other vapour generatingboilers for Oman and UAE,respectively.
Converters, ladles, ingot moulds and casting machines
used in metallurgy or metal foundries (HS Code 8454)
Major importers of metal processingmachinery, such as converters,
ladles, ingot moulds and castingmachines (HS Code 8454) in theworld are China, USA, Russia,Germany and Ukraine. India isfourth largest importer in the worldunder this product category andimported US $ 163 million worth ofmetal processing machinery, underthis product group, in 2006-07.
Austria, Japan and Italy are themajor source countries for thedeveloping country importers underthis product group. China has also
served as major source country forthe import requirements ofIndonesia.
India has also exported metalprocessing machinery valued US $37 million in 2006-07. Major marketsfor India, for this product group,include Iran, USA, Nigeria, UAE andHong Kong. India is the largestsource country for UAE, and secondlargest source country for Nigeria, forimports under this product category.
Other major source countries forimport of this product group by Iran,Nigeria and UAE include China,Austria, UK, USA, South Africa andChina.
Furnace burners for liquid
fuel, mechanical stokers,including their mechanical
graters, ash discharges etc.
(HS Code (8416)
Major importers of processmachinery (HS Code 8416) such as
Table 59:MARKET ANALYSIS FOR PROCESS PLANT MACHINERY UNDER
HS CODE 8454
Existing Major Major Major MajorDeveloping competitors Developing Competitors
Country CountryMarkets Importersfor India in the World
Iran South Africa, Chile China Austria, Japan andand Armenia Italy
Nigeria China, Italy and UK Ukraine Austria, Italy andPoland
UAE USA, Austria Indonesia Japan, China andand China Taiwan
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furnace burners, mechanicalstokers and graters in the worldinclude Germany, USA, France andUK. Amongst developing countries,major importers under this productcategory include China, Turkey andIran. These developing countrieshave principally imported fromGermany, Italy, UK and USA.India’s import of process plantsunder the category amounted to US$ 30 million in 2006-07.
India’s export of process plants(HS Code 8416) amounted to US $10 million in 2006-07. Majordestinations of India’s exports underthis product category include Oman,Germany, Nigeria, UAE andSingapore. Luxemburg and UK haveprincipally served as sourcecountries for import of this productgroup by Oman and Nigeria. UAE
has principally sourced fromGermany, USA and China.
Calandering or other rolling
machines other than for metals or glass (HS Code 8420);
Major importers of calandering orother rolling machines, other thanused for processing metals andglass (HS Code 8420), in the worldinclude Sweden, USA, Canada andBelgium, amongst developedcountries; and China, Taiwan andTurkey, amongst developingcountries. Germany, Taiwan, Japan
and USA are major sourcecountries for import of this productgroup by these developingcountries. India importedcalendaring and rolling machinesunder this category to the tune ofUS $ 14 million in 2006-07.
India’s exports of calendaringand rolling machines (HS Code
8420) in the year 2006-07 amountedto US $ 10 million in 2006-07. Major
Table 60:MARKET ANALYSIS FOR PROCESS PLANT MACHINERY UNDER
HS CODE 8416
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
Oman Luxemburg, UK and China Germany, USA andNetherlands Italy
Nigeria UK, Japan, and Turkey Italy, GermanyLuxemburg and UK
UAE Germany, USA and Iran Germany, UKChina and Italy
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export destinations for India underthis product category include forSudan, USA, UAE, Nepal and Iran.Sudan and Nepal, India is the soleexporter, except in some years, inwhich negligible imports have been
witnessed from countries such asItaly and South Africa. UAE hasprincipally imported from USA, Italyand Qatar, while Iran has principallyimported from countries such as Italy,Germany and Croatia.
Auxiliary plant for use with
boilers of heating (HS Code 8404)
Major importers of auxiliary plant foruse with boilers (HS Code 8404)in the world are China, USA,Indonesia, India, Canada andMexico. India’s imports in the year2006-07 under this productcategory amounted to
US $ 8 million. While China has
sourced its import requirements
from countries such as Japan,
Spain and South Korea, it had
served as a major supplier to other
developing countries such as
Indonesia and Mexico. South Koreais another major supplier for these
developing countries.
India’s export of auxiliary plants
for use with boilers for heating
purposes (HS Code 8404) amounted
to US $ 24 million in 2006-07. Major
markets for India under this product
category include Sudan, UAE,
Australia and Egypt. India is second
largest source country for UAE, and
third largest source country for
Sudan, under this product category.
Other major source countries include
developed countries such as UK,USA, Italy and Netherlands.
Table 61:MARKET ANALYSIS FOR PROCESS PLANT MACHINERY UNDER
HS CODE 8420
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
Sudan Italy China Germany, Finland andTaiwan
UAE USA, Italy and Qatar Taiwan Japan, Germany andUSA
Iran Italy, Germany and Turkey Italy, Germany and
Croatia Taiwan
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Hydraulic turbines, water
wheels (HS Code 8410)
Major importers of hydraulicturbines and water wheels (HSCode 8410) in the world are China,USA, India, Iran and Turkey. India
imported hydraulic turbines andwater wheels to the tune of US $21 million in 2006-07. Chinaimported hydraulic turbines andwater wheels from Austria,Germany and Brazil. Major sourcecountries for import by Iran includeAustria, Switzerland and China; andAustria, Russia and France for
Turkey.
India’s export of hydraulicturbines and water wheels (HS Code8410) in the year 2006-07 wasaround US $ 10 million. Majormarkets for India include Malaysia,Vietnam, Saudi Arabia, Sudan andUAE, under this product category.India was the fourth largest source
country for Vietnam. Other major
source countries for Vietnam includeChina, Russia and Japan. Malaysiaimported products under thiscategory mainly from Germany,Singapore and Italy; and SaudiArabia imported this product groupmainly from Belgium, UK and
France.
Presses, crushers and similarmachinery used in manufacture ofwine, cider or fruit juices(HS Code 8435).
Major importers of presses,crushers or other machinery used inmanufacture of wine and fruit juices
in the world include Spain, USA andFrance. Amongst developingcountries major importers wereChina, Venezuela and Iran. Majorsource countries for thesedeveloping countries includeSwitzerland, Germany, Italy, USAand China. India’s import under thisproduct group amounted to US $ 10million in 2006-07.
Table 62:MARKET ANALYSIS FOR PROCESS PLANT MACHINERY UNDER
HS CODE 8404
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
Sudan UK, Italy and China China Japan, Spain andSouth Korea
UAE UK, Netherlands and Indonesia Finland, South KoreaSpain and China
Egypt France, USA and UK. Mexico South Korea, USAand China
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India’s export of presses,crushers or other machinery used inmanufacture of wine and fruit juices(HS Code 8435) were valued at US$ 6 million in 2006-07. Majordestinations of India’s exports
include USA, Nigeria, UAE andKenya. India is the largest source
country for UAE and Kenya. Othermajor source countries for UAEinclude France, Italy and Spain; andmajor source countries for Kenyainclude South Africa and Italy. Nigeriaprincipally sourced its import
requirements from China, Malaysiaand USA.
Table 63:MARKET ANALYSIS FOR PROCESS PLANT MACHINERY UNDER
HS CODE 8410
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
Malaysia Germany, Singapore China Austria, Germany andand Italy Brazil
Vietnam China, Russia and Iran Austria, SwitzerlandJapan and China
Saudi Arabia Belgium, UK and Turkey Austria, Russia and
France France
SOURCE: UN COMTRADE
Table 64:MARKET ANALYSIS FOR PROCESS PLANT MACHINERY UNDER
HS CODE 8435
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
Nigeria China, Malaysia and China Switzerland, GermanyUSA and Italy
UAE France, Italy and Spain Venezuela USA, China and Italy
Kenya South Africa and Italy Iran South Africaand Italy
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Electrical Machinery
Major categories of electricalmachinery imported in the world
include: Electrical transformers,static converters and inductors (HSCode 8504); Electrical apparatusfor switching or protecting electricalcircuits (exceeding 1000v) (HSCode 8535); Electrical apparatusfor switching or protecting electricalcircuits (below 1000v) (HS Code8536); Electrical capacitors, fixed,adjustable or variable (HS Code
8532); Electric motors andgenerators (excluding generatingsets) (HS Code 8501); and Electricgenerating sets and rotaryconverters (HS Code 8502).
Electrical transformers, static
converters and inductors (HS Code 8504)
Major importers of electrictransformers, static converters, andinductors (HS Code 8504) in theworld include USA, Germany andJapan among developed countries,and China, Hong Kong, Mexico andTaiwan, among developingcountries. In the year 2006-07,India imported electricaltransformers and static converters
to the tune of US $ 557 million.Major source countries for China,Hong Kong, Mexico and Taiwan fortheir import under this categoryinclude Japan, USA and South
Table 65:WORLD IMPORT OF SELECT ELECTRICAL MACHINERY
(US $ Million)
HS Code Description 2005 20068504 Electrical transformers, static converters 44762.43 58350.41
and inductors
8535 Electrical apparatus for switching or 5674.36 5765.59protecting electrical circuits(exceeding 1000v)
8536 Electrical apparatus for switching or 55589.42 69930.51protecting electrical circuits(below 1000v)
8532 Electrical capacitors, fixed, 16153.77 20649.51adjustable or variable
8501 Electric motors and generators 26833.51 33216.81(excluding generating sets)
8502 Electric generating sets and 10666.41 15320.19rotary converters
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Korea. There has also been lot oftrading amongst the triad, China,Hong Kong and Taiwan.
In the year 2006-07, Indiaexported transformers and static
converters valued US $ 645 million.
Major countries to which India’s
transformers were exported include
USA and the Netherlands. Amongst
developing countries, India’s
transformers were exported to Syria,
Malaysia and UAE. India is the
largest supplier of transformers toSyria. Other major source countries
for import of transformers by Syria
include China, France and Spain. In
both Malaysia and UAE, China is a
major supplier. Other major suppliers
to these countries include Singapore,
Hong Kong, Germany and Japan.
Electrical apparatus for
switching or protecting electrical circuits (exceeding
1000v) (HS Code 8535)
Major importers of switchgears andcontrol gears (over 1000v) (HSCode 8535) in the world includeUSA, Germany and Spain.Amongst developing countries,China, UAE and Mexico are theleading importers in the world.China and Mexico have principallysourced their import requirementsof products under this categoryfrom Germany, Switzerland andUSA. Hong Kong has sourced itsrequirements from Singapore,Japan and Germany. India’s importof switchgears and control gears(over 1000v) amounted to aroundUS $ 51 million in 2006-07.
Table 66:MARKET ANALYSIS FOR TRANSFORMERS UNDER
HS CODE 8504
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
Syria China, France and China Hong Kong,Spain South Korea and
JapanMalaysia Singapore, China and Hong Kong China, Japan and
Hong Kong USA
UAE Germany, China and Mexico USA, China andJapan Hong Kong
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India’s export of switchgears andcontrol gears in the year 2006-07amounted to around US $ 90 millionin 2006-07. Major destinations ofIndia’s exports under this productcategory include USA, UK, andFrance. Amongst developing
countries, UAE, Brazil and Vietnamare the leading importers of Indianswitchgears and control gears (over1000v). Germany, Sweden andFrance are major source countriesfor UAE, Brazil and Vietnam. Inaddition, Japan is one of the majorsource countries for UAE, whileSweden is one of the major source
countries for Vietnam.
Electrical apparatus for switching or protecting
electrical circuits (below 1000v) (HS Code 8536)
Major importers of switchgears andcontrol gears (below 1000v) (HScode 8536) in the world include
USA, Germany and Franceamongst developed countries, andChina, Hong Kong and Mexicoamongst developing countries.While significant trade has beenhappening between China andHong Kong, countries such as
Japan, USA and Germanyremained as major suppliercountries for these markets. India,in the year 2006-07, importedswitchgears and control gearsvalued US $ 462 million.
India’s export of switchgears andcontrol gears (below 1000v) in theyear 2006-07 was valued at US $
234 million. Major markets for Indiainclude UK, USA and Germany.Amongst developing countries, UAE,Philippines and Saudi Arabia weremajor markets for India. Importrequirements in these developingcountry markets were catered bydeveloped countries such asGermany, UK, France and Japan.
Table 67:MARKET ANALYSIS FOR SWITCHGEARS / CONTROL GEARS
(EXCEEDING 1000V) UNDER HS CODE 8535
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
UAE France, Germany and China Japan, Germany andJapan Switzerland
Brazil Germany, Sweden and Mexico USA, Germany andFrance Switzerland
Vietnam Germany, Australia and Hong Kong Singapore, Japan andSweden Germany
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Electrical capacitors, fixed,adjustable or variable
(HS Code 8532)
Major importers of electricalcapacitors (HS Code 8532) in theworld are China, Hong Kong, USAand Taiwan. Significant tradehappen amongst the majordeveloping country importers, viz.,Hong Kong, China and Taiwan.These three countries supply toeach other with regard to thisproduct category, in addition tosourcing their requirements fromJapan. India’s imports under this
product category in the year 2006-07 were of the order of US $ 135million.
India’s exports under thisproduct category in the year 2006-07 were valued at US $ 39 million.Major markets for India include USA,Spain, Qatar, Turkey and UAE. While
Qatar has principally sourced from
India, Turkey has sourced its
requirements from China, Italy and
South Korea. UAE has principally
sourced from China, Germany and
Sweden.
Electric motors and generators (excluding
generating sets) (HS Code 8501)
Major importers of electric motorsand generators (HS Code 8501) inthe world are USA, Germany andChina. Amongst developing
countries, China, Hong Kong andMexico are the leading importers.China has also served as one ofthe major source countries forimports, under this productcategory, to Hong Kong andMexico. Similarly, Hong Kong hasserved as one of the major source
Table 68:MARKET ANALYSIS FOR SWITCHGEARS / CONTROL GEARS
(BELOW 1000V) UNDER HS CODE 8536
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
UAE France, UK, Germany China Hong Kong, Japanand Taiwan
Philippines Japan, Singapore and Hong Kong China, Japan andHong Kong USA
Saudi Arabia USA, UK, and France Mexico USA, Japan andGermany
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countries for import by China, underthis product category. In addition,these countries have sourced theirimport requirements from Japan,Germany, USA, Thailand andSingapore. India’s imports of
electric motors and generators inthe year 2006-07 amounted to US$ 244 million.
India’s exports, in the year 2006-07, under this product category,amounted to US $ 133 million. Majormarkets for India include USA, SaudiArabia, Switzerland and UAE.Developing country markets, such as
Saudi Arabia, UAE and Nigeria haveprincipally sourced theirrequirements from China, Germanyand USA.
Table 69:MARKET ANALYSIS FOR ELECTRIC CAPACITORS UNDER
HS CODE 8532
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importersfor India in the World
Qatar USA and Italy China Hong Kong, Japanand Taiwan
Turkey China, Italy and Hong Kong China, Japan andSouth Korea Taiwan
UAE China, Germany and Taiwan Japan, China andSweden Hong Kong
SOURCE: UN COMTRADE
Table 70:MARKET ANALYSIS FOR MOTORS AND GENERATORS UNDER
HS CODE 8501
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry Country
Markets Importersfor India in the World
Saudi Arabia USA, Germany and China Hong Kong, JapanChina and Germany
UAE Germany, China and Hong Kong China, Thailand andUSA Singapore
Nigeria China, Germany and Mexico USA, Germany andSouth Africa China
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Electric generating sets and
rotary converters (HS Code 8502)
Major importers of electricgenerating sets and rotaryconverters (HS Code 8502) in theworld are USA, China and UK. Inaddition to China, developingcountries such as UAE, Nigeria,Hong Kong and Indonesia are othermajor importers under this productcategory. India’s import of electric
generating sets in the year 2006-07 amounted to US $ 114 million.USA, UK and France are majorsuppliers to China, Nigeria andFrance, respectively. China andHong Kong have also served assuppliers to each other.
India’s export of electricgenerating sets in the year 2006-07
amounted to US $ 361 million. Majormarkets for India include USA,
Portugal, Mali and UAE. Portugalhas sourced its import requirementsunder this product category from EUcountries such as UK, Spain andGermany, whereas, Mali hassourced its requirements fromFrance, UK and Senegal. UAE hassourced from China, UK and USA.
Inferences
Globally, the capital goods industryis worth around US $ 4.5 trillion.Japan Germany and USA are
traditionally large suppliers ofdifferent sub-segments of capitalgoods. Of late, Asian countriessuch as China, Taiwan and SouthKorea have become major playersin production and export of capitalgoods. Consumption of capitalgoods has also increasedsubstantially in developing Asian
countries due to thrust given to thevalue-added manufacturing.
Table 71:MARKET ANALYSIS FOR ELECTRIC GENERATING SETS UNDER
HS CODE 8502
Existing Major Major Major MajorDeveloping competitors Developing CompetitorsCountry CountryMarkets Importers
for India in the WorldPortugal Spain, UK and China Hong Kong, USA,
Germany and Japan
Mali France, UK, and Nigeria UK, China andSenegal France
UAE China, UK, and USA Hong Kong UK, Singapore andChina
SOURCE: UN COMTRADE
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Under the machine tools category, though there has beengrowth in exports, in the last threeyears, the import of machine toolshave outgrown in several sub-segments, bringing down the export-import ratio (Annexure – 3). Thisindicates that there is significantroom for market expansion in thedomestic market. Market analysesreveal that major developing countryimporters of machine tools in theworld include Mexico, Thailand,
Turkey, Poland and China. India’smajor developing country marketsfor machine tools have been UAE,Nigeria and Thailand. In addition,India exports machine tools to hostof developing countries of Africa, andWest and South Asia, such asKenya, Sudan, Bangladesh, Iran andSri Lanka. Though some of the sub-segments of machine tools areexported to leading developingcountry markets, in many cases theshare of India in these markets areinsignificant. Thus, careful targetingof export markets need to beundertaken by the players in theIndian machine tool sector forpenetration in new markets andexpansion of market share in existing
markets.The technology upgradation
fund scheme of Government of Indiahas contributed to the capacityexpansion in the domestic textilesector significantly. Most of suchcapacity expansion has occurredthrough imports. As a result, the
export-import ratio of textile machinery sector has also comedown significantly in the last threeyears (Annexure -4), especially insub-segment non-woven machinery.Major developing country importersof textile machinery in the worldinclude China, Hong Kong, Turkeyand Pakistan. On the other hand,India’s major developing countrymarkets for textile machinery includeBangladesh, Indonesia and UAE.There is ample scope for exporting
to other developing countries ofSouth Asia, especially to Pakistanand Sri Lanka. In addition, countriessuch as Turkey and Egypt could alsobe targeted for expanding exportsand enhancing market share.
Construction and mining equipment is another area in whichthe export-import share has come
down in the last three years(Annexure - ), except under theproduct group pulley tackle andhoists (HS Code 8425). Thisindicates that there is significantroom for capacity expansion inconstruction and mining equipmentsector also. Amongst developingcountries, China, Mexico andIndonesia are the leading importersin the world. While developedcountries cater most of their importrequirements, India could explore theopportunities in these countries.India’s export markets include UAE,Kuwait and Qatar in west Asia andAfrican countries such as Kenya,Tanzania, Togo, Tunisia and
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Mauritius. The share of India in theimport of these countries is notalways significant. Thus, thesecountries could be targeted formarket expansion by theconstruction and mining equipmentcompanies in India.
Analysis of process plant machinery sub-segment (Annexure-6) revealed that in some productgroups, export is greater thanimports, and export-import ratio inmost such product groups has alsoimproved in the last three years.However, in many product groups,there has been reduction in export-import ratio. Major developingcountry importers include China,Mexico, Taiwan, Indonesia andTurkey. Though India’s exports ofprocess plant equipments areoriented towards these countries, the
volume is not consistent with thepotential. India’s major exportmarkets for process plants includeUAE, Saudi Arabia, Nigeria, Kenyaand Vietnam. Except for fewproducts in few countries, India’sshare is insignificant even in thesemarkets.
Mixed results are also observed
in the sub segment of electrical machinery and equipments(Annexure -7 ). While in most of theproduct groups the export-importratio, has increased, reduction hasbeen witnessed in product groupssuch as electric motors and
generators. Major developingcountry importers in the world areChina, Hong Kong, Taiwan andMexico. Another interesting trend inworld trade is that there has beensignificant trade amongst thesecountries, especially China, HongKong and Taiwan, trading with eachother. India’s main developingcountry export destinations ofelectrical machinery include UAEand Saudi Arabia. Other developingcountries to which India has been
exporting the electrical equipmentsinclude Qatar, Mali, Nigeria, Syriaand Philippines. However, India’sshare in total import of many of thesecountries is not significant, indicatingthe opportunities for marketexpansion in these countries.
In sum, the analyses show thatthere need to be capacity expansion
in the Indian capital goods industryto cater to the rising demand, bothfrom domestic and export markets.Technological solutions throughresearch and development are to beoffered to capture new markets;effective market enhancement andcustomer retention strategies arerequired to sustain and expand in the
existing developing country markets.A comprehensive analysis ofchallenges faced by the Indiancapital goods industry is carried outin the next chapter, along with a setof focussed strategies to overcomesuch challenges.
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Indian capital goods industry hassignificant opportunities both indomestic and export markets.However, there are also challengesengulfing this sector; appropriate
strategies need to be adopted by thissector to emerge as a leading playerin both domestic and export markets.Some of the challenges andstrategies identified are brieflydiscussed below:
CHALLENGES
Technological Competency
The technologies used forproduction as also in assembly ofIndian capital goods are not alwaysupdated in tune with the globaltechnological trends. While thereare some players who havetechnological competencies,especially in design capability,application innovation and processinnovation, the technologicalcapabilities of large number ofplayers, especially in the SMEsector, are limited. In addition, thetechnological competencies ofplayers in the SME sector, whoprovide components orintermediates to original equipment
manufacturers, are also limited.Transfer of technology from otherdeveloped countries has also notbeen significant despiteliberalization of policies for
technology transfer and foreigndirect investments.
Import of Second HandCapital Goods
Under the Export Promotion CapitalGoods (EPCG) Scheme, import ofsecond hand capital goods ispermitted in India for pre-
production, production and post-production activities. The capitalgoods that may be imported underthis scheme include spares(including refurbished/ reconditioned spares), tools, jigs,fixtures, dies and moulds. Import ofcapital goods under this schemewould attract only 5% customs dutysubject to an export obligation,equivalent to 8 times of duty savedon the capital goods imported. Itmay be mentioned that machinetools, refinery equipments,construction and mining machinery,plastic processing machinery andprinting machinery are some of thesecond hand capital goods
6. CHALLENGES AND STRATEGIES
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imported into India. During theperiod April – December 2007, over14300 EPCG applications havebeen sanctioned with licenses / authorizations, with a CIF dutycredit of nearly Rs. 12,000 crores.While the main objective of thisscheme is to help modernization ofthe industry by offering dutyconcessions, the imported capitalgoods pose stiff competition to theindigenous capital goodsmanufacturers.
Cost Competitiveness
The Indian capital goods industrylargely uses crucial inputs such asiron and steel that are of domesticorigin. Over the years, there hasbeen significant increase in cost ofinputs, but the players in thisindustry are unable to pass on the
price increase to the endconsumers, due to competitionfrom imports.
The capital goods industry alsohas high incidence of taxation; anumber of indirect duties (such asexcise duty, octroi, entry tax, sales
tax and service tax) are levied addingup to the end user cost. This makesthe indigenous supplies costlier vis-à-vis imported capital goods. Someestimates have put the costdisadvantage, due to such levies, toan extent of over 20%.
Delivery Schedules
It may be mentioned that most ofthe capital goods are not suppliedoff-the-shelves and are custom-made to suit the requirements of
end users. Thus, the deliveryschedule to cater to the order islonger than many other engineeringproducts. However, due to variousreasons, including infrastructureconstraints, the delivers schedulesof Indian capital goods suppliersare longer than their foreigncounterparts. Industry sources
estimate that the delivery time ofIndian capital goods manufacturersare two times longer than theirglobal counterparts affecting thecompetitiveness in deliveryschedules. In such circumstances,imported capital goods are
Table 72:TRENDS IN LICENSES ISSUED UNDER EPCG SCHEME
Year Number of licenses / CIF Duty Creditauthorisations (Rs. Crore)
2005-06 16387 6397
2006-07 21226 15233
2007-08 (Apr-Dec) 14361 11936
SOURCE: Directorate General of Foreign Trade
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preferred over Indian capital goods,though they are technologically andfunctionally comparable withinternational standards.
STRATEGIES
Transformation in Objectiveand Approach
Sale of capital goods is not an onetime business but require technicalsupport in transportation, erection,staff training (for operation and
minor repairs), continuous servicemaintenance and periodicalupgradation in technology. All overthe world, the capital goodsmanufacturers are turningthemselves as engineering servicescompanies, offering turnkeysolutions to retain the customers.Players in Indian capital goods
industry may also increasinglyreorient their approach to transforminto service based organizations.Such service orientation would helpthe industry in sharpening thecompetitive advantage.
Strengthening Research andDevelopment
Consistent with global trends,Indian capital goods industry alsoneeds to grant high priority toinnovation, and research anddevelopment. The R&D intensity offirms in Indian capital goodsindustry is less than 1%, far belowthan the R&D intensity of othersectors such as pharmaceuticals
and automobiles. Precisionmeasuring, materials engineering,and process innovation are someof the areas for strengthening R&Din Indian capital goods industry. Itis also important to increase thelinkages between the publicresearch systems and industry tofacilitate technology transfer andenhance the responsiveness of thecapital goods industry.
Common R&D facilities underthe cluster approach or under thepublic-private partnership approachwould enhance the technologicalstrengths of the Indian capital goodsindustry. In this context, it may bementioned that the textile machineryindustry, with the support ofacademia and Government, has setup a R&D center at Indian Instituteof Technology (IIT), Mumbai. It is
reported that textile engineeringrelated projects undertaken by post-graduate students in IIT, Mumbai, inthis R&D center, would be useful inproduct development and innovationin process engineering in the textileengineering industry. Such R&Dcenters may be encouraged tocontribute to the technologydevelopment in other capital goods
sub-sectors also.
Strengthening TechnologicalCompetencies
In order to enhance productivity,product quality and operatingefficiency, the players in the sectorneed to constantly upgrade their
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technological competencies. TheDepartment of Heavy Industry,Government of India, has proposedto undertake a comprehensivescheme for technology upgradationand R&D facilities for modernizationof capital goods industry. Theproposed scheme may endeavourto help the players in the Indiancapital goods industry in trackingglobal trends in product andprocess technologies, with specificobjective of cost control, besides
enhancing productivity, energyefficiency, eco-friendliness, productquality, operating flexibility andefficiency. The scheme may alsohelp enhance the usage ofinformation technology thatprovides convenience to thecustomers, and help enhancecustomer base and new avenues
for profitability. Such R&D Centresmay also be conceived as trainingplatforms for skill upgradation of theshop-floor technicians in the capitalgoods industry.
Fund for TechnologyUpgradation in Capital GoodsIndustry
It may be fair to surmise that thereare capacity constraints at thefollowing two levels in the capitalgoods industry:
a) Capacity constraints to cater tothe demand in volume,considering the growthmomentum in the industrial
sector as also the overalleconomic growth;
b) Capacity constraints to cater to
the technological demands thatmay improve efficiency inoperations and cost control.
While fiscal incentives wouldhelp attract investments in the capitalgoods industry in general, addingproduction capacity, a fund forsupporting technology upgradation inthe capital goods industry may be
considered in order to achievequality, standardization andbenchmarking with internationalproducts.
Enhancing Market Position
Analysis of trends in imports bymajor countries reveals that thereis vast scope for market expansion
in many developing countries towhich India is currently exporting.Various market entry strategiesmay be adopted including attainingmarket leadership, throughacquisition and consolidation, andachieving economies of scale in theprice sensitive markets. Mergersand acquisitions routes may also beadopted by players in the Indian
capital goods industry, to build andnurture brands in export markets.Value-based supply chain may becreated through buildingcustomized products and offer ofengineering services to createexclusiveness in competitivemarkets. Sales approach should be
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transformed to provide solutionsthat add value to the clients throughenhancement of process efficiencyand product quality. Effective ofLines of Credit mechanisam alsohelp the exporters in enteringunexplored markets (Box - 1).
Introducing New ProductLines
Over the years, players in theIndian capital goods industry hasbeen diversifying the product lines
offered with the objective ofmitigating risks associated withbusiness and cyclical trends.However, more focus should begiven in building new generationmachines that may be in demandin future. Such new generationmachines should have greaterflexibility to produce a variety of
products. Such new generationmachineries also createopportunities for offeringengineering services that are lesssensitive to business and cyclicalfluctuations.
Tapping OutsourcingOpportunities
Globally, OEMs are increasinglyoutsourcing their design andengineering services to developingcountries like India to add value atlower cost and to focus on theircore competencies. According to aNASSCOM study, spending onengineering services across theworld is estimated to be US $ 750
billion in 2004, which is expectedto cross US $ 1 trillion in 2020.While only 15-20 billion (2% of totaldemand) is being at present off-
shored, the off-shoring market is
expected to grow to US $ 150
billion to US $ 225 billion (around
20% of total demand) by 2020.
Capital goods industry, one of the
potential players in India in the
engineering services segment,
holds significant potential to tap the
growing business opportunities in
the outsourcing arena.
Increasing Interaction withEnd-Users
Capital goods manufacturers alsoneed to closely interact with end-users, (especially with sectors suchas automobile, defense, aeronatics,space, metals, construction,textiles, chemicals andpharmaceuticals), to understand thelatest trends in manufacturing; theexpectations of end users inperformance of machinery; areasfor improvement in processefficiency, energy efficiency, productquality, and cost control strategies.The trends in shifting of
manufacturing base fromdeveloped to developing countriescould also be unearthed throughinteractions with end-userindustries. Such interactions wouldhelp the players in capital goodsindustry to source appropriatetechnologies, in addition to making
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Box 1:LINES OF CREDIT: A MARKET ENTRY MECHANISM FOR CAPITAL
GOODS INDUSTRY
Exim Bank has been placing special emphasis on extension of Lines of Credit(LOCs), as an effective market entry mechanism, with particular focus on smalland medium enterprises. Exim Bank extends LOCs to overseas financialinstitutions, regional development banks, sovereign governments and other entitiesoverseas to enable buyers in those countries to import equipments, goods andservices for their developmental and infrastructure projects, on deferred creditterms. The Bank, as of end March 2008, has 89 operating LOCs in Africa, Asia,CIS, Europe and Latin America with credit commitments aggregating US $ 2.96billion, including the LOCs extended at the behest of Government of India.
Some of the LOCs are with specific objective of capacity development in
manufacturing and infrastructure sectors of other developing countries, and thusprovide opportunities for Indian capital goods industry. These include: agro-processing and food processing projects (Cote d’Ivoire, Ethiopia); power generation / transmission electrification projects (Mali, Ghana, Sudan, Ethiopia, Mozambique,Myanmar, Cambodia, Vietnam, Nepal); setting up of / rehabilitation ofmanufacturing plants (cement in DR Congo and Djibouti; cotton yarn, steel,agricultural implements in Chad; tractor assembly in Gambia; Sugar in Fiji); andexport of select capital goods (machineries to Equatorial Guinea; agriculturalimplements to Senegal, Burkina Faso, Guinea Bissau; water drilling equipmentsto Mozambique; and water pumps to Jamaica). It may be mentioned that, inaddition, the LOC extended, at the behest of Government of India, to Iran, ismeant for export of capital goods.
Indian capital goods industry has been increasingly using the LOC mechanismto export the machineries and equipments to other developing countries. In theyear 2006-07, the year for market analysis in this study, about US $ 250 millionworth capital goods were exported using these LOCs. These include electricalequipments to Ghana, Lesotho, Vietnam, Ethiopia, Jamaica and Mozambique;process plants and equipments to D.R.Congo, Tobago and Trinidad, Ghana,Kenya, Myanmar, Vietnam and Senegal; and textile machinery to Vietnam. Thusit may be construed that such market entry mechanisms help establish products
abroad and generate export opportunities subsequently.Indian capital goods exporters could make effective use of such LOCs in
expanding their market share in other developing countries.
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plans towards capacityenhancement to cater to thegrowing demand.
Thrust on Safety Standardsand Product Liability
Exporting to USA and EU requiresthe machinery manufacturers tocarefully consider the requirementsfor both regulatory and liabilityprotection. USA has a complex,
multi-tiered regulatory environmentfor machinery and themanufacturers need to define the
method of indicating compliancewith regulatory issues in most
acceptable manner. The
Occupational Safety and Health
Administration (OSHA), the agency
in USA, which is responsible for
regulating machinery used in the
workplace, has defined the product
Box 2:ASSESSMENT OF CONFORMITY STANDARDS FOR MACHINERIES IN
USA AND EUROPE
In USA, all machines are assessed with two separate technical standards,ANSI/UL508A for Industrial Control Panels, and NFPA 79 for Electrical Standardfor Industrial Machinery. UL508A, being an OSHA-recognized standard, is theprimary standard, and applies to all industrial control enclosures on the machine.The overall machine is also assessed based on NFPA 79, which addresses wiringoutside the machine enclosures, as well as machinery-related requirements suchas interlocking devices, guarding, and such other safety issues. In addition, specialrequirements exist for special types of machines. These requirements are appliedover and above the basic requirement for ANSI/UL508A and NFPA 79 forcompliance. Examples of these requirements are the ANSI B11 series of standardsfor metal working machines, the ANSI B151 series of standards for injectionmolding machines, the ASME B20.1 and B30.13 standards for factory automationmachinery, and the ANSI RIA R15.06 standard for industrial robots.
The CE marking is a mandatory in European Union marking for certainproduct groups to indicate conformity with the essential health and safetyrequirements set out in host of European Union Directives. The Directivesgoverning the safety standards of capital goods include Machinery Directive 98/ 37/EC, Lifts Directive (95/16/EC), Directive on Personal Protective Equipments89/686/EEC, Directive on Noise Emissions 2000/14/EC. In addition, the EUDirective concerning Liability for Defective Products make EU importers liable forthe products they import, including the machinery they provide to their employeesfor work. To permit the use of a CE mark on a product, proof that the item meetsthe relevant requirements must be documented. This is mostly achieved using anexternal test house which evaluates the product and its documentation.
SOURCE: OSHA, USA; and the European Commission
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requirements and safety standards,as also the periodicity of evaluatingsafety audits. In European Union,there are host of Directives, suchas Machinery Directive 98/37/EC,Lifts Directive (95/16/EC), Directiveon Personal Protective Equipments89/686/EEC, Directive on NoiseEmissions 2000/14/EC, governingthe safety standards of capitalgoods. In addition the EU Directiveconcerning Liability for DefectiveProducts make EU importers liable
for the products they import,including the machinery theyprovide to their employees for work.Exporters of capital goods,particularly to USA and EU shouldcarefully follow the trends inproduct standards and conformtheir products to safety suchrequirements.
Accelerating Investments inInfrastructure
Growth in investments ininfrastructure sectors, especially forconstruction of road / rail network,bridges and dams, ports (both airand sea), and handling facilities insuch ports and power stationsboost the demand for capital
equipments. This would besignificant in the case of electricalmachinery (investments in powersector) and construction / earthmoving equipments (investments inroad / rail infrastructure), whichwould have direct impact. Inaddition, investments in
infrastructure would boost themanufacturing sector and there byprovide growth opportunities forcapital goods such as machinetools, textile machinery and processplant machinery.
The consultation paper on‘Investment in Infrastructure Duringthe Eleventh Five Year Plan’, hasestimated that about US $ 500 billioninvestments are required in Indianinfrastructure sector to sustain theGDP growth of 9%, during theEleventh Five Year Plan. This worksout to approximately 2.3 times higheras compared to the actualinvestments in the infrastructuresector that have taken place in theTenth Five Year Plan. If this volumeof investment demand in theinfrastructure sector is metsystematically, the capital goods
industry would get furthermomentum.
Accelerating CapitalInvestments in IndianManufacturing Sector
Government may also consideroffering incentives to themanufacturing sector for
upgradation of technology andequipments. The incentives thatmay be considered are taxconcessions, accelerateddepreciation allowances and exciseduty relief. Such strategy may beparticularly relevant for SME sectorthat would be encouraged to
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upgrade their technologicalcompetence, manufacturingprocess and product quality.
IN SUMIndia should leverage its inherentstrengths, such as availability ofpool of skilled workforce, low costoperations and existence of largedomestic demand, in strengtheningcapital goods industry. Leveragingthe abundant availability of softwareskills in engineering design anddrawing would strengthentechnological competitiveness.Continuous training and skillupgradation would help the humanresources in the industry to capturethe trends in new processes andtechnologies.
Scale economies would position
India further as a cost-effectivemanufacturing base for capital
goods. Strategies such as
transformation of the shop-floors fully
flexible to produce different types of
machineries and redesigning the
machining process to accommodate
usage of common components /
parts in various types of machineries,
would contribute to the scaleeconomies significantly.
Technology sourcing, from
countries such as Germany,Switzerland, Italy and Spain, may beencouraged, especially in the contextof shift in manufacturing base fromdeveloped to developing countries.The strengths of machiningtechnologies in other developingcountries such as China and Taiwanshould be effectively learnt and
adapted by Indian players.Changing trends in product
quality and safety standards shouldbe monitored and complied tosustain market presence indeveloped countries. Developingcountries of Asia, Africa, LatinAmerica and central and east Europeshould be targeted for market
expansion as these countries arehaving almost similar raw materialand manufacturing base, like India.Effective supply chain managementand thereby optimizing the productdelivery schedules should be giventop priority to retain the existingcustomers as also to fetch newcustomers.
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ANNEXURE - 1
List of Capital Goods Items Covered in Index of IndustrialProduction
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Shipment of Textile Machinery: Various SegmentsCountry 2005 2006
Shipments % Share Shipments % Share % Change(‘000) (‘000) (2006/05)
Short staple spindlesChina 5910.5 59.6 6680.7 56.9 13.0India 1429.8 14.4 2779.2 23.7 94.4
Pakistan 1037.8 10.5 668.6 5.7 -35.6
Bangladesh 540.7 5.4 433.7 3.7 -19.8
Turkey 307.6 3.1 187.7 1.6 -39.0
World 9925.2 11740.5 18.3
Long staple spindlesChina 82.9 45.3 101.1 52.4 22.0
Iran 10.8 5.9 28.5 14.8 163.9
Turkey 42.3 23.1 13.9 7.2 -67.1
India 0.0 0.0 11.4 5.9 N/a
Italy 14.0 7.6 8.8 4.6 -36.8
World 182.8 193.1 5.6
Open end rotorsChina 246.1 65.8 195.0 55.4 -20.8
Turkey 18.4 4.9 33.9 9.6 84.2
India 20.1 5.4 32.8 9.3 63.5
Brazil 22.1 5.9 9.9 2.8 -55.1
Russia 4.3 1.2 9.9 2.8 128.1
World 374.2 352.0 -5.9
Double heater, false twist spindle draw texturing machineryChina 259956 84.3 152768 69.3 -41.2
India 13176 4.4 31088 14.1 126.7
Hong Kong 7656 2.5 7680 3.5 0.3
Egypt 1488 0.5 4416 2.0 196.8Vietnam 5920 1.9 3120 1.4 -47.3
World 308330 220288 -28.6
Single heater, false twist spindle draw texturing machineryChina 3384 49.2 6912 67.2 104.3
Turkey 1008 14.7 852 8.3 -15.5
Italy 192 2.8 656 6.4 241.7
Peru 0 0.0 576 5.6 N/a
South Korea 0 0.0 432 4.2 N/a
World 6872 10288 49.7
SOURCE: Textile Outlook International, July –August 2007, No.130
ANNEXURE-2
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A N N E X U R E - 3
S O U R C E : D i r e c t o r a t e G e n e r a l o f
C o m m e r c i a l I n t e l l i g e n c e a n d S t a t i s t i c s ,
G o v e r n m e n t o f I n d i a
I n d i a ’ s E x p o r t ,
I m p o
r t , a n
d
E x p o r t - I m p o r t
R a
t i o
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t M a c
h i n
e T o o
l s
H S
D e s c r i p
t i o n
2 0 0 4 -
0 5
2 0 0 5
- 0 6
2 0 0 6 - 0
7
C o d e
E x p o r t s
I m p o
r t s
E x p - I m p
E x p o r t s
I m p o r t s
E x p - I m p
E x p o r t s
I m p o r t s
E x p - I m p
( U S $ M n )
( U S $ M
n )
R a t i o ( % )
( U S $ M n )
( U S $ M n )
R a t i o ( % )
( U S $ M n )
( U S $ M n )
R a t i o ( % )
8 4 5 7
M a c h i n i n g c e n t e r s a n d m u l t i s t a t i o n
t r a n s f e r m a c h i n e s f o r w o r
k i n g m e t a l
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L a t h e s f o r r e m o v i n g m e t a
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1 1 . 7 1
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2 7 . 7 3
1 4 . 1 2
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1 7 . 8 7
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. 7 2
1 8 . 9 5
8 4 5 9
M a c h i n e t o o l s f o r d r i l l i n g ,
b o r i n g ,
m i l l i n g , t h r e a d i n g o r t a p p i n g b y
r e m o v i n g m e t a l s o t h e r t h a
n l a t h e s
6 . 2 5
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M a c h i n e t o o l s f o r d e b u r r i n
g ,
s h a r p e n i n g , g r i n d i n g , h o n i n g , l a p p i n g ,
p o l i s h i n g m e t a l s
5 . 1 0
5 2 . 4 0
9 . 7 3
4 . 6 3
1 1 6
. 6 9
3 . 9 7
5 . 4 6
1 3 5
. 1 7
4 . 0 4
8 4 6 1
M a c h i n e t o o l s f o r p l a n i n g , s h a p i n g ,
s l o t t i n g , b r o a c h i n g , g e a r - c
u t t i n g ,
g r i n d i n g o r f i n i s h i n g w o r k i n g b y
r e m o v i n g m e t a l s
4 . 3 6
4 7 . 8 7
9 . 1 1
7 . 2 3
7 7
. 5 6
9 . 3 2
6 . 5 7
1 3 7
. 0 9
4 . 7 9
8 4 6 2
M a c h i n e t o o l s f o r w o r k i n g
m e t a l b y
f o r g i n g , h a m m e r i n g a n d d
i e - s t a m p i n g
1 9 . 0 2
1 0 0 . 2 6
1 8 . 9 7
2 5 . 1 4
1 7 5
. 2 5
1 4 . 3 4
2 5 . 3 1
2 7 5
. 6 6
9 . 1 5
8 4 6 3
O t h e r m a c h i n e t o o l s f o r w
o r k i n g m e t a l ,
s i n t e r e d m e t a l c a r b i d e s w
i t h o u t
r e m o v i n g m a t e r i a l s
5 . 3 3
1 7 . 0 1
3 1 . 3 3
6 . 4 3
3 1
. 4 9
2 0 . 4 2
6 . 2 2
3 8
. 7 8
1 6 . 0 4
8 4 6 4
M a c h i n e t o o l s f o r w o r k i n g
s t o n e s ,
c e r a m i c s , c o n c r e t e , a s b e s t o s - c e m e n t
o r o t h e r m i n e r a l m a t e r i a l s
2 . 1 6
3 4 . 7 9
6 . 2 1
1 . 9 7
4 0
. 3 4
4 . 8 8
3 . 5 5
4 9
. 6 1
7 . 1 6
8 4 6 5
M a c h i n e t o o l s f o r w o r k i n g
w o o d , c o r k ,
b o n e , h a r d r u b b e r , h a r d p
l a s t i c s e t c . , .
9 . 8 7
3 5 . 5 7
2 7 . 7 5
6 . 8 4
5 2
. 0 3
1 3 . 1 4
6 . 5 9
7 2
. 3 8
9 . 1 0
8 4 6 7
T o o l s f o r w o r k i n g i n t h e h
a n d , p n e u m a t i c
o r w i t h s e l f - c o n t a i n e d n o n
- e l e c t r i c m o t o r
1 7 . 7 6
2 9 . 0 4
6 1 . 1 5
2 2 . 9 0
4 1
. 9 2
5 4 . 6 2
2 6 . 9 3
6 2
. 8 2
4 2 . 8 6
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I n d i a ’ s E x p o r t ,
I m p o
r t , a n
d
E x p o r t - I m p o r t
R a
t i o
o f S e
l e c
t T e x
t i l e
M a c
h i n e r y
H S
C o
d e
D e s c r i p
t i o n
2 0 0 4 -
0 5
2 0 0 5
- 0 6
2 0 0 6 - 0
7
E x p o r t s
I m p o
r t s
E x p - I m p
E x p o r t s
I m p o r t s
E x p - I m p
E x p o r t s
I m p o r t s
E x p - I m p
( U S $ M n )
( U S $ M
n )
R a t i o ( % )
( U S $ M n )
( U S $ M n )
R a t i o ( % )
( U S $ M n )
( U S $ M n )
R a t i o ( % )
8 4 4 4
M a c h i n e s f o r e x t r u d i n g , d r a w i n g ,
t e x t u r i n g o r c u t t i n g m a
n - m a d e t e x t i l e
m a t e r i a l s
2 . 0 0
2 6 . 1 9
7 . 6 4
1 . 4 9
2 1
. 6 1
6 . 8 9
2 . 9 3
1 5
. 9 0
1 8 . 4 2
8 4 4 5
M a c h i n e s f o r p r e p a r i n g t e x t i l e f i b r e s ,
s p i n n i n g , t w i s t i n g a n d
o t h e r y a r n
m a k i n g m a c h i n e r y
2 1 . 6 1
2 0 5 . 3 2
1 0 . 5 5
1 5 . 4 3
4 8 0
. 1 8
3 . 2 1
1 7 . 9 2
8 4 1
. 2 0
2 . 1 3
8 4 4 6
W e a v i n g m a c h i n e s ( l o
o m s )
3 . 4 4
1 7 9 . 4 8
1 . 9 2
2 . 6 9
3 4 4
. 9 7
0 . 7 8
5 . 4 4
2 7 8
. 1 8
1 . 9 6
8 4 4 7
K n i t t i n g / s t i t c h - b o n d i n
g m a c h i n e s ,
a n d o t h e r m a c h i n e s f o
r m a k i n g l a c e s ,
e m b r o i d e r y a n d t r i m m i n g s
3 . 1 3
1 3 7 . 6 5
2 . 2 7
1 . 7 5
3 1 4
. 2 1
0 . 5 6
3 . 2 0
3 8 8
. 6 1
0 . 8 2
8 4 4 8
A u x i l i a r y m a c h i n e r y s u
c h a s
d o b b i e s , j a c q u a r d s e t c
5 1 . 0 9
1 3 0 . 4 8
3 9 . 1 5
5 4 . 3 4
1 9 0
. 7 0
2 8 . 4 9
6 1 . 3 0
2 4 1
. 4 7
2 5 . 3 8
8 4 4 9
M a c h i n e r y f o r m a n u f a c t u r e o f f i n i s h i n g
f e l t s o r n o n - w o v e n s
2 . 5 9
2 . 8 8
8 9 . 9 3
0 . 8 2
5
. 5 5
1 4 . 7 7
0 . 5 1
3 6
. 0 2
1 . 4 1
8 4 5 0
W a s h i n g m a c h i n e s
1 4 . 9 1
1 5 . 5 7
9 5 . 7 6
1 9 . 5 4
2 4
. 3 7
8 0 . 1 8
7 . 3 4
3 4
. 1 0
2 1 . 5 2
8 4 5 1
M a c h i n e r y f o r w a s h i n g
, d r y i n g ,
w r i n g i n g , i r o n i n g , p r e s
s i n g , b l e a c h i n g ,
d y e i n g , d r e s s i n g a n d f i n i s h i n g
7 . 0 6
9 2 . 6 8
7 . 6 2
1 1 . 4 0
2 2 1
. 7 3
5 . 1 4
9 . 2 8
2 4 7
. 9 6
3 . 7 4
S O U R C E : D i r e c t o r a t e G e n e r a l o f
C o m m e r c i a l I n t e l l i g e n c e a n d S t a t i s t i c s ,
G o v e r n m e n t o f I n d i a
A N N E X U R E - 4
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CMYK
A N N E X U R E - 5
I n d i a ’ s E x p o r t ,
I m p o
r t , a n
d
E x p o r t - I m p o r t
R a
t i o
o f S e
l e c
t C o n s t r u c
t i o n
a n
d
M i n i n g
M a c
h i n e r y
H S
C o
d e
D e s c r i p
t i o n
2 0 0 4 -
0 5
2 0 0 5
- 0 6
2 0 0 6 - 0
7
E x p o r t s
I m p o
r t s
E x p - I m p
E x p o r t s
I m p o r t s
E x p - I m p
E x p o r t s
I m p o r t s
E x p - I m p
( U S $ M n )
( U S $ M
n )
R a t i o ( % )
( U S $ M n )
( U S $ M n )
R a t i o ( % )
( U S $ M n )
( U S $ M n )
R a t i o ( % )
8 4 2 5
P u l l e y t a c k l e a n d h o i s
t s o t h e r t h a n
s k i p h o i s t s , w i n c h e s a
n d j a c k s
3 . 6 5
1 2 . 7 9
2 8 . 5 3
6 . 1 3
1 9
. 0 9
3 2 . 1 1
6 . 9 9
2 4
. 2 2
2 8 . 8 6
8 4 2 6
D e r r i c k s , c r a n e s , m o b
i l e l i f t i n g f r a m e s ,
s t r a d d l e c a r r i e r s
3 2 . 1 2
1 2 2 . 9 3
2 6 . 1 3
2 1 . 6 3
2 3 5
. 0 0
9 . 2 0
1 8 . 4 3
2 6 5
. 9 0
6 . 9 3
8 4 2 7
F o r k - l i f t t r u c k s , o t h e r t r u c k s f i t t e d w i t h
l i f t i n g o r h a n d l i n g e q u i p m e n t s
2 . 7 0
7 . 5 7
3 5 . 6 7
4 . 7 0
2 1
. 5 0
2 1 . 8 6
6 . 8 2
3 4
. 0 5
2 0 . 0 2
8 4 2 8
O t h e r l i f t i n g , h a n d l i n g ,
l o a d i n g o r
u n l o a d i n g m a c h i n e r y
( e . g . l i f t s , c o n v e y o r s , e s c a l a t o r s )
1 8 . 0 5
6 0 . 0 6
3 0 . 0 5
1 7 . 5 9
1 2 3
. 2 0
1 4 . 2 8
2 7 . 4 4
3 4 2
. 9 7
8 . 0 0
8 4 2 9
S e l f p r o p e l l e d b u l l d o z e r s , s i n g l e - d o z e r s ,
g r a d e r s , l e v e l e r s , s c r a
p e r s , m e c h a n i c a l
s h o v e l s , e x c a v a t o r s , a
n d r o a d r o l l e r s
1 8 . 1 4
1 0 8 . 5 4
1 6 . 7 1
1 7 . 9 3
1 8 6
. 3 4
9 . 6 2
2 6 . 5 9
2 8 3
. 0 5
9 . 3 9
8 4 3 0
O t h e r m o v i n g , g r a d i n g
, l e v e l i n g ,
s c r a p p i n g , e x c a v a t i n g ,
c o m p a c t i n g e q u i p m e n t s
7 9 . 9 4
2 5 3 . 9 1
3 1 . 4 8
3 4 . 7 3
1 6 6
. 3 6
2 0 . 8 7
4 4 . 0 3
2 8 5
. 4 0
1 5 . 4 2
S O U R C E : D i r e c t o r a t e G e n e r a l o f
C o m m e r c i a l I n t e l l i g e n c e a n d S t a t i s t i c s ,
G o v e r n m e n t o f I n d i a
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CMYK
A N N E X U R E - 6
I n d i a ’ s E x p o r t ,
I m p o
r t , a n
d
E x p o r t - I m p o r t
R a
t i o
o f S e
l e c
t P r o c e s s
P l a n
t M a c
h i n e r y
H S
D e s c r i p
t i o n
2 0 0 4 -
0 5
2 0 0 5
- 0 6
2 0 0 6 - 0
7
C o d e
E x p o r t s
I m p o
r t s
E x p - I m p
E x p o r t s
I m p o r t s
E x p - I m p
E x p o r t s
I m p o r t s
E x p - I m p
( U S $ M n )
( U S $ M
n )
R a t i o ( % )
( U S $ M n )
( U S $ M n )
R a t i o ( % )
( U S $ M n )
( U S $ M n )
R a t i o ( % )
8 4 0 2
S t e a m
o r o t h e r v a p o u r g e n e r a t i n g b o i l e r s
4 1 . 0 0
1 6 . 5 7
2 4 7 . 4 3
4 2 . 2 3
2 9
. 8 2
1 4 1 . 6 2
7 4 . 8 9
1 9
. 5 6
3 8 2 . 8 7
8 4 0 3
C e n t r a l h e a t i n g b o i l e r s o t h e r t h a n t h o s e
h e a d i n g 8 4 0 2
1 0 . 4 5
0 . 4 7
2 2 2 3 . 4 0
1 2 . 5 1
6
. 2 5
2 0 0 . 1 6
1 2 . 3 1
2
. 0 9
5 8 8 . 9 9
8 4 0 4
A u x i l i a r y p l a n t f o r u s e w i t h
b o i l e r s o f h e a t i n g
7 . 6 3
7 . 6 4
9 9 . 8 7
1 4 . 0 1
1 9
. 5 4
7 1 . 7 0
2 4 . 1 2
8
. 4 9
2 8 4 . 1 0
8 4 1 0
H y d r a u l i c t u r b i n e s , w a t e r w
h e e l s
5 . 5 0
4 . 4 3
1 2 4 . 1 5
4 . 4 8
1 4
. 5 0
3 0 . 9 0
9 . 8 9
2 1
. 1 1
4 6 . 8 5
8 4 1 6
F u r n a c e b u r n e r s f o r l i q u i d
f u e l ,
m e c h a n i c a l s t o k e r s , i n c l u d i n g t h e i r
m e c h a n i c a l g r a t e r s , a s h d i s c h a r g e s e t c .
3 . 5 2
2 0 . 2 2
1 7 . 4 0
5 . 3 3
3 3
. 9 6
1 5 . 6 9
1 0 . 3 2
3 0
. 4 9
3 3 . 8 4
8 4 1 7
I n d u s t r i a l o r l a b o r a t o r y f u r n
a c e s a n d
o v e n s , i n c l u d i n g i n c i n e r a t o r s
1 7 . 8 7
4 4 . 4 4
4 0 . 2 1
2 6 . 1 4
1 0 3
. 5 1
2 5 . 2 5
2 8 . 7 7
1 2 6
. 9 9
2 2 . 6 6
8 4 1 8
R e f r i g e r a t o r s , f r e e z e r s a n d
o t h e r
r e f r i g e r a t i n g o r f r e e z i n g e q
u i p m e n t
( o t h e r t h a n a i r c o n d i t i o n e r s
)
5 3 . 3 3
1 0 6 . 1 6
5 0 . 2 3
7 4 . 9 9
1 1 9
. 2 1
6 2 . 9 1
9 2 . 6 1
1 7 5
. 9 2
5 2 . 6 4
8 4 1 9
M a c h i n e r y , p l a n t o r l a b e q u i p m e n t f o r
t r e a t m e n t o f m a t e r i a l s t h r o
u g h a p r o c e s s
i n v o l v i n g t e m p e r a t u r e
1 0 3 . 3 7
1 7 0 . 9 9
6 0 . 4 5
1 8 6 . 7 8
2 5 2
. 4 1
7 4 . 0 0
2 5 7 . 5 4
2 9 3
. 2 5
8 7 . 8 2
8 4 2 0
C a l e n d a r i n g o r o t h e r r o l l i n g m a c h i n e s
o t h e r t h a n f o r m e t a l s o r g l a s s .
8 . 1 9
6 . 4 8
1 2 6 . 3 9
7 . 2 4
3 2
. 7 2
2 2 . 1 3
1 0 . 4 6
1 4
. 0 4
7 4 . 5 0
8 4 2 1
C e n t r i f u g e s , i n c l u d i n g c e n t r i f u g a l d r y e r s ,
f i l t e r i n g o r p u r i f y i n g m a c h i n
e r y a n d
a p p a r a t u s
7 1 . 2 0
1 7 1 . 2 6
4 1 . 5 7
9 0 . 6 4
2 3 4
. 9 5
3 8 . 5 7
1 1 6 . 2 5
3 4 2
. 9 9
3 3 . 8 9
8 4 3 5
P r e s s e s , c r u s h e r s a n d s i m
i l a r m a c h i n e r y
u s e d i n m a n u f a c t u r e o f w i n e , c i d e r o r
f r u i t j u i c e s
4 . 1 0
4 . 0 0
1 0 2 . 5 0
4 . 9 2
2
. 9 4
1 6 7 . 3 5
5 . 8 1
9
. 9 0
5 8 . 6 8
8 4 3 8
M a c h i n e r y n o t s p e c i f i e d e l s e w h e r e b u t
u s e d i n p r e p a r a t i o n o r m a n u f a c t u r e o f
f o o d o r d r i n k
2 4 . 3 0
2 5 . 8 5
9 4 . 0 0
3 7 . 6 5
2 8
. 2 5
1 3 3 . 2 7
3 6 . 9 5
6 0
. 7 2
6 0 . 8 5
8 4 5 4
C o n v e r t o r s , l a d l e s , i n g o t m
o u l d s a n d
c a s t i n g m a c h i n e s u s e d i n
m e t a l l u r g y
o r m e t a l f o u n d r i e s
3 6 . 4 5
4 6 . 0 0
7 9 . 2 4
3 8 . 3 6
1 2 7
. 6 7
3 0 . 0 4
3 7 . 4 5
1 6 3
. 3 6
2 2 . 9 2
8 4 5 5
M e t a l r o l l i n g m i l l s a n d r o l l s
t h e r e o f
5 7 . 8 2
5 7 . 0 6
1 0 1 . 3 3
8 2 . 4 7
1 4 3
. 4 8
5 7 . 4 7
1 0 4 . 7 0
2 4 3
. 7 2
4 2 . 9 6
S O U R C E : D i r e c t o r a t e G e n e r a l o f
C o m m e r c i a l I n t e l l i g e n c e a n d S t a t i s t i c s ,
G o v e r n m e n t o f I n d i a
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CMYK
A N N E X U R E - 7
I n d i a ’ s E x p o r t ,
I m p o r t , a n
d
E x p o r t - I m p o r t R
a t i o
o f S e
l e c
t E l e c
t r i c
a l M a c
h i n e r y
H S
C o
d e
D e s c r i p
t i o n
2 0 0 4 - 0 5
2 0 0 5 - 0
6
2 0 0 6 -
0 7
E x p o r t s
I m p o
r t s
E x p - I m p
E x p o r t s
I m p o r t s
E x p - I m p
E x p o r t s
I m p o
r t s
E x p - I m p
( U S $ M n )
( U S $ M
n )
R a t i o ( % )
( U S $ M n )
( U S $ M
n )
R a t i o ( % )
( U S $ M n )
( U S $ M
n )
R a t i o ( % )
8 5 0 1
E l e c t r i c m o t o r s a n d g e
n e r a t o r s
( e x c l u d i n g g e n e r a t i n g s e t s )
1 1 0 . 2 6
1 5 5 .
1 9
7 1 . 0 4
1 3 6 . 8 7
1 8 9
. 0 2
7 2 . 4 1
1 3 3 . 3 0
2 4 4 . 4 3
5 4 . 5 3
8 5 0 2
E l e c t r i c g e n e r a t i n g s e t s a n d r o t a r y
c o n v e r t e r s
3 1 . 1 6
9 2 .
8 4
3 3 . 5 6
6 5 . 4 1
1 6 0
. 0 2
4 0 . 8 7
3 6 1 . 4 3
1 1 4 . 1 0
3 1 6 . 7 7
8 5 0 4
E l e c t r i c a l t r a n s f o r m e r s , s t a t i c
c o n v e r t e r s a n d i n d u c t o
r s
2 0 7 . 6 8
2 9 8 .
4 1
6 9 . 5 9
3 7 0 . 3 9
4 0 5
. 7 4
9 1 . 2 9
6 4 5 . 4 6
5 5 7 . 1 2
1 1 5 . 8 6
8 5 3 2
E l e c t r i c a l c a p a c i t o r s , f i x e d ,
a d j u s t a b l e o r v a r i a b l e
1 3 . 6 9
9 3 .
4 5
1 4 . 6 5
2 5 . 0 2
1 1 8
. 5 6
2 1 . 1 0
3 9 . 4 8
1 3 5 . 3 1
2 9 . 1 8
8 5 3 5
E l e c t r i c a l a p p a r a t u s f o r s w i t c h i n g o r
p r o t e c t i n g e l e c t r i c a l c i r
c u i t s
( e x c e e d i n g 1 0 0 0 v )
5 6 . 4 0
2 9 .
0 8
1 9 3 . 9 4
6 6 . 9 3
4 7
. 7 2
1 4 0 . 0 5
8 9 . 5 7
5 0 . 7 2
1 7 6 . 6 0
8 5 3 6
E l e c t r i c a l a p p a r a t u s f o r s w i t c h i n g o r
p r o t e c t i n g e l e c t r i c a l c i r
c u i t s
( b e l o w 1 0 0 0 v )
1 1 2 . 7 0
2 5 6 . 3 2
4 3 . 9 7
1 8 3 . 4 8
3 3 4
. 9 1
5 4 . 7 8
2 3 3 . 8 2
4 6 2 . 0 6
5 0 . 6 3
S O U R C E : D i r e c t o r a t e G e n e r a l o f
C o m m e r c i a l I n t e l l i g e n c e a n d S t a t i s t i c s , G o v e r n m e n t o f I n d i a
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CMYK
CMYK
RECENT OCCASIONAL PAPERS
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67. International Joint Ventures and Technology Transfer in Developing
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Potential
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74. Export Processing Zones in Select Countries : Critical Success Factors75. Essays in International Economics
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CMYK
90. Indian Silk Industry: A Sector Study
91. Select COMESA Countries: A Study of India’s Trade and Investment
Potential
92. Sri Lanka: A Study of India’s Trade and Investment Potential93. Potential for Export of IT Enabled Services from North Eastern Region
of India
94. Potential for Export of Horticulture Products from Bihar and Jharkhand
95. Increasing Wage Inequality in Developed Countries: Role of Changing
Trade, Technology and Factor Endowments
96. Essays on Trade in Goods and Factor Movements Under Increasing
Returns to Scales
97. Export of Organic Products from India: Prospects and Challenges
98. Export Potential of Indian Medicinal Plants and Products
99. Select Southern African Countries: A Study of India’s Trade andInvestment Potential
100. BIMST-EC Initiative: A Study of India's Trade and Investment Potential
with Select Asian Countries
101. Some Aspects of Productivity Growth and Trade in Indian Industry
102. Intra-Industry Trade In India’s Manufacturing Sector
103. Export Potential of Indian Plantation Sector: Prospects and Challenges
104. Fresh Fruits, Vegetables and Dairy Products: India's Potential For
Exports to Other Asian Countries
105. Biotechnology: Emerging Opportunities for India
106. ASEAN Countries: A Study of India's Trade and Investment Potential
107. Essays on Globalisation and Wages in Developing Countries
108. Select West African Countries: A Study of India's Trade and Investment
Potential
109. Indian Leather Industry: Perspective and Export Potential
110. GCC Countries: A Study of India’s Trade and Export Potential
111. Indian Petroleum Products Industry : Opportunities and Challenges
112. Floriculture : A Sector Study
113. Japanese & U.S. Foreign Direct Investments in Indian
Manufacturing : An Analysis114. Maghreb Region: A Study of India’s Trade and Investment Potential
115. Strengthening R & D Capabilities in India
116. CIS Region: A Study of India’s Trade and Investment Potential
117. Indian Chemical Industry: A Sector Study
118. Trade and Environment: A Theoretical and Empirical Analysis
119. Indian Pharmaceutical Industry : Surging Globally
120. Regional Trade Agreements: Gateway to Global Trade
121. Knowledge Process Outsourcing: Emerging Opportunities for India122. Indian Mineral Sector and its Export Potential
123. SAARC: An Emerging Trade Bloc
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CMYK
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