Capital Goods

Robust growth engine, driven by government infrastructure investments and manufacturing focus, offering significant investment potential.

Last updated: September 8, 2025

The engineering sector accounts for 63% of the overall foreign collaborations

7.2%

Share of the total manufacturing segment in India’s GDP is represented by the electrical Industry

$109.32 Bn

India’s exports of engineering goods in FY 2023–24

12%

Share in manufacturing

US$ 30 billion

Estimated production of India’s electrical equipment industry in 2022–23, with consistent double-digit growth in transmission equipment and transformers (IEEMA).

Construction equipment growth

Driven by government-led infrastructure projects, urban development, smart cities, and transportation expansion (ICEMA).

Machine tool industry expansion

Strong growth supported by demand from automotive, aerospace, and defence sectors (IMTMA).

Government support

Policies launched by the Ministry of Heavy Industries under ‘Make in India’ to boost domestic production, reduce imports, and promote advanced manufacturing.

100%

FDI allowed in the engineering and construction sector.

Vision 2022 for Indian Electrical Equipment Industry

To make India the country of choice for the production of electrical equipment and reach an output of US$ 100 billion by balancing exports and imports.
Scheme for Enhancement of Capital Goods Sector Phase II (2022)

The objective of PHASE 2 is to expand and enlarge the impact created by Phase I pilot scheme, thereby providing greater impetus through creation of a strong and globally competitive capital goods sector that contributes at least 25% to the manufacturing sector.
National Manufacturing Policy

The National Manufacturing Policy envisaged manufacturing to contribute 25% to GDP and create 100 million jobs.

FAME II

The main objective of the scheme is to encourage faster adoption of electric and hybrid vehicle by way of offering upfront incentive on purchase of electric vehicles and also by way of establishing a necessary charging Infrastructure for electric vehicles. The scheme will help in addressing the issue of environmental pollution and fuel security.
Stimulus measures for Infrastructure, Capital Goods and Defence

An additional budget of US$ 3.4bn has been allocated for capital spending towards multiple sectors including Defence, Infrastructure and Capital Goods.

Electrical Equipment (Quality Control) Order 2020

The Order provides the stipulations that every electrical equipment produced must adhere to.

Department of Heavy Industry

011-23062365

Visit Website

The Department promotes engineering industry, heavy electrical, industrial machinery and auto industry.

All India Association of Industries

+91-22-2201-9265

Visit Website

AIAI is a premier industry association representing industries across sectors.

Department of Heavy Industry

Investment Opportunities

  • Creation of Research and Testing infrastructure through the National Automotive Testing and R&D Infrastructure Project (NATRIP).
  • India’s power generation, transmission and distribution sectors require technology and infrastructure to support 900 GW by generation capacity by 2032.
  • India's mining and resources sector presents new opportunities for private sectors on the back of favorable legislations.
  • The Smart City Mission aims to retrofit 100 urban centres across India with focus on mobility, low-cost housing and sewerage.
Useful Links:

Key Investors

India has a well-oiled enterprise promoting machinery that is backed by strong legislative, judiciary, executive and capital establishments

Ansaldo STS has interests in urban rail infrastructure projects in India.

Samsung Heavy Industries has energy and shipping projects in India.

Alstom is currently executing metro projects in several Indian cities.

Siemens focuses on electrification, automation and digitization in India.

Hitachi India operates in engineering, procurement and civil construction.

ENABLING ENVIRONMENT

India has a well-oiled enterprise promoting machinery that is backed by strong legislative, judiciary, executive, and capital establishments

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