Advertisment

Engineering: The Engine of Growth for SMEs

author-image
CIOL Bureau
Updated On
New Update

BANGALORE, INDIA:

Employing over 4 million skilled and semi-skilled workers, the engineering sector is by far the largest sector of the overall industrial segments in India.

Advertisment

Due to increased investment in infrastructure development and industrial production, the engineering industry in India has witnessed an unprecendented growth in the past few years. Today, India has an intense and diversified industrial machinery/capital base competent of rolling out an entire range of industrial machinery.

The engineering industry is diverse, with a number of segments and divisions. However, despite the diversity, the sector is relatively less fragmented at the top. As the sector demands a high level of capability and investment, it is dominated by large organised players.

Industry Composition

- Multinational companies

- Joint ventures

- Large domestic players

- Regional players in the organised sector

- A large number of small players in the unorganised sectors which form the lower end of the sector.

Advertisment

Also read : Alibaba to educate SMEs in Engg sector

The engineering industry can be broadly divided into two categories– heavy engineering and light engineering segments.

Key Growth Drivers of the Indian Engineering Sector

The demand for engineering goods depends largely on the the GDP growth of a country. The growth, however, is a result of expenditure in core segments such as power, railways, and infrastructure development, private sector investments, and the speed at which projects are implemented. The power sector is the largest contributor to the revenues of engineering companies.

Advertisment

What basically drives growth of the engineering industry is capacity creation in sectors such as infrastructure, oil & gas, power, mining, automobiles, auto components, steel, refinery, consumer durables, etc. The other factors are listed below-

- Growth of the key end-user industries for engineering products

- Continuous flow of skilled man-power in the industry

- Government’s thrust on the power and construction industries

- India being preferred by global companies as an outsourcing destination as it enjoys lower labour cost and better  designing capabilities

Looking Ahead

Emerging trends such as outsourcing of engineering  services can provide new opportunities for quantum growth with new product designing, product improvement, maintenance and designing manufacturing systems increasingly getting outsourced to countries like India and China.

With development in associated sectors like automotive, one of the largest evolving markets for engineering and industrial goods, and a well developed technical human resources pool, India is poised to make significant strides in all segments

of engineering.

Source: www.dare.co.in