With a total market size of $92 billion and production valued at $ 32 billion, Capital Goods sector today contributes to 12% of India’s manufacturing output. In order to realize the potential of Make in India campaign, a joint task force has been formulated to frame a National Capital Goods Policy over the next few months.
The Ministry of Heavy Industries and Public Enterprises has constituted a ‘Joint Task Force’ between the Department of Heavy Industry (DHI) and Confederation of Indian Industry (CII) to realize the potential of domestic capital goods under the ‘Make in India’ theme.
The Joint Task Force will take up issues faced by the industry with a view to evolving a roadmap for the Indian capital goods sector.
One of the key elements of this process is formulation of the initial framework for the National Capital Goods Policy. Capital Goods comprises of sub-sectors such as textile machinery, machine tools, electrical and power equipment, plastic machinery, construction equipment, process plant equipment and dies, moulds and press tools.
On the export front, India’s share in global exports from the sector is currently very low, ranging between 0.1% - 0.6% across various sub-sectors. In contrast, in countries like China, Germany, Japan, Korea this range is between 7% - 16% depending on the sub-sector.
Commenting on the public consultation underway for the National Capital Goods Policy, Chandrajit Banerjee, Director General, CII, expressed confidence that “this first ever policy for the sector would act as a catalyst and game-changer for this critical industry. As the capital goods sector serves, in many ways, as the ‘engine’ of India’s industrial growth, a strong Capital Goods sector is mission critical to achieving the aspiration of the 'Make in India' campaign.”
The vision of the proposed policy is to increase the share of capital goods contribution from present 12% to 20% of total manufacturing activity by 2022 and establish India amongst the major capital goods producing nations in the world.
The Base Paper outlines key strategic pillars for the Indian capital goods sector. Key areas of focus are creation of an enabling eco-system, creation and expansion of market, promotion of exports, development of human resources, enhancement of technology & IPR, standards, focus on SMEs and building necessary support services.
Sub-sector specific strategies have also been formulated for giving special direction and focus. These strategies include elements such as access to capital, trade remedial measures, taxation, customs duties, preferential trading arrangements, WTO issues, attracting of FDI, technological upgradation, standards, safety and environmental awareness.
(News courtesy: cii.in)