Growth Of The Electrical Equipment Industry

Growth Of The Electrical Equipment Industry

The electrical equipment sector is crucial to India. It plays a key role in the economy of India. The growth of electrical energy and electronic devices has increased tremendously since 1994. The equipment sector has also witnessed a growth in production. Electrical equipment manufacturers in India are contributing to the India revenue.

The industry has witnessed 2% positive growth. Some of the factors that have accelerated this growth are:

  • Growth in production due to increase in exports and growth in domestic orders.
  • Transmission line towers, meters, cables and capacitors are still showing positive growth.

Some of the factors that still continue to be negative are:

  • Rotating machines, switchgear and transformers.
  • Domestic manufacturers still continue to be hit by delayed project execution.

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The Indian electrical equipment industry is worth 1.30 lakh crores after four consecutive quarters of negative growth. The last time the industry saw negative growth was in 2013. The fall in the revenue was mainly due to the domestic electrical equipment manufacturing industry. It was facing major problems due to issues, bottlenecks related to fuel and coal linkages, land and environmental clearances. These factors led to a sharp decline in orders in the domestic market. The orders were either getting cancelled or were being put on hold. Weak investment sentiments and financial constraints led to the downfall.

The domestic industry was also facing increasing competition from foreign electrical equipment suppliers. New players joined the industry. Global slow down and political turmoil led to lower demand for exports. India also saw lack of domestic raw material availability and shortage of skilled manpower.

In the financial year of 2014 and 2015, the electrical equipment industry experienced as minute growth of 2%. The growth can largely be attributed to the increase in exports of electrical equipment. The domestic orders still continue to be sluggish. The global orders have led to the growth. A sluggish growth still continues in the country’s power sector due to delays in project execution and financial constraints which continues to hit the domestic electrical equipment suppliers.

Although, overall imports saw a decline in the year 2012 and 2013, the imports of power transformers, insulators, generators and AC motors continue to increase and are capturing a large share of the domestic market.

The export growth is mainly visible in developed countries such as USA, Germany, UK, Australia and Canada. This clearly should the acceptability of ‘Made in India’ products by foreign countries and developed and developing countries. This also proves that electrical equipment manufactured in India has the desired quality and competitive cost.

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