Light engineering industry is one of
the largest segment of the overall industrial growth of a nation. It is
an intermediate unit whose demand depends on a variety of end-user industries
such as power, mining, oil and gas, consumer goods, automotive and the
general manufacturing sector. In other words, the products covered under
this industry are largely used as inputs to the capital goods / heavy
engineering industries. Being highly labour intensive, the light engineering
sector generates ample employment opportunities in the economy, especially
into the areas where there is an abundant supply of skilled and semi-skilled
India has a strong engineering and capital goods base. It is a major exporter of light engineering goods which include a wide range of items, such as forgings, fasteners, bearings, steel pipes and tubes, diagnostic medical instruments, etc. The presence of well-developed and sound 'light engineering' sector is of high importance to the Indian economy and is the basis of almost all productive and business activities in the country. The size of Indian light engineering industry is estimated at around US $ 7 billion. The major suppliers to this industry are the companies supplying them with raw materials like steel, aluminium, etc.
In India, the Department
of Industrial Policy and Promotion (DIPP), under the Ministry
of Commerce and Industry, is the nodal agency for the development
of light engineering industries, that is, monitors their progress at regular
intervals and suggests possible policy incentives, as per the requirement.
The Department is responsible for formulation and implementation of promotional
and developmental measures for growth of entire industrial sector in general
and of some selected industries like light engineering, leather, rubber,
light machine tools, etc. in particular. It is involved in framing and
administering overall industrial policy and Foreign direct investment
(FDI) policy as well as promoting FDI inflow into the country. It plays
an active role in investment promotion through dissemination of information
on investment climate and opportunities in India as well as by advising
prospective investors about various policies and procedures.
Light Engineering is a diverse industry
with the number of distinctive sub-sectors. Some of them are:-
- Roller Bearing Industry:- Bearings are used to minimize friction between moving parts and find application in rotating parts of virtually all machines and across all sectors such as automobiles, electric motors, diesel engines, industrial machinery and machine tools, etc. They generally consist of inner ring, outer ring, rolling elements, cage and seals and come in two general shapes, that is, ball or roller. The ball bearings is the biggest segment of the industry and contributes to approximately half of the total market size in volume terms. Rollers come in four basic styles, namely, cylindrical, needle, tapered and spherical. The automobile sector accounts for bulk of the total demand of this industry with estimated share of 35 per cent, electrical industry share is 12 per cent, after market (replacement) share is 40 per cent and the remaining 13 per cent consumption is by other industries. The approximate export and import figures of the ball and roller bearings for the year 2006-07 were Rs. 835.3 crore and Rs. 1920.6 crore, respectively. While, the production of ball and roller bearings during the same year was 327.9 million. During 2007-08 (upto December 2007), it was reported at 218.87 million numbers. However, the bearing industry has been delicensed and is eligible for 100 per cent FDI under the automatic route.
- Welding Equipment and Consumables:-
Traditionally, welding has been used as a means of fabrication. But, over the years, it is effectively used for cladding, hard-surfacing, cutting and a number of other applications for maintaining and reclaiming old machinery and equipments. The demand of the industry depends on the automobile, steel and heavy engineering sectors. The organised sector has a dominating presence in the automatic and semiautomatic welding equipment and higher end electrodes, while the unorganised sector mainly serves manual metal arc welding equipment and low-end electrode segments.
- Medical and Surgical Instruments:-
This industry has been playing a critical role in the health care delivery system of a country. With the liberalisation of economy and increased awareness for health, the demand for medical/surgical instruments has gone up substantially. This has accelerated the growth in indigenous production as well as imports. The present day healthcare has become completely dependent on electro medical instruments and these have become indispensable tools for medical professionals mainly for diagnosis, therapy, and patient monitoring and health care. Indigenous manufacturers are currently in a position to manufacture wide variety of electro medical equipment such as electrocardiograph (ECG ) machine, X-ray scanner, CT scanners, short wave physiotherapy unit, electro surgical units, blood chemistry analyser, etc. However, sophisticated instruments such as Nuclear Magnetic Resonance (NMR) scanners, multi channel monitors, etc. are not currently manufactured in the country. Most of the units manufacturing medical equipments are in the small scale industrial (SSI) sector. The production for the year 2005-06 in the non-SSI sector has been Rs. 301.5 crores. During 2007-08 (upto December 2007), the production was at Rs. 245.60 crore.
- Ferrous Castings:- The Indian foundry industry is the fifth largest in the world. It is vital for the growth and development of engineering industries as it constitutes essential intermediates for automobiles, industrial machines, power plants, chemicals and fertilizer, cement plants, etc. Considering the wide range of engineering applications of these castings and high potential for exports, there is considerable scope for establishing additional capacity particularly for high end applications. The approximate export and import figures of the casting industry for the year 2006-07 were Rs. 1978.6 crore and Rs. 47.5 crore, respectively. The production of steel castings and C.I. castings for the same year in the organised sector was 7.79 lakh tonnes. During 2007-08 (upto December 2007), it was reported at 5.72 lakh tonnes. The industry has been delicensed and is eligible for automatic approval up to 100 per cent of FDI.
- Process Control
Instruments:-This industry covers a wide range of instruments and systems required for monitoring and measuring of physical, chemical and biological properties. Their importance is significant in high cost, large and sophisticated process industries like fertilizer, steel, power plant, refineries, petrochemicals, cement and other process industries. They are required for measurement and control of process parameters like pressure, temperature, humidity, level, flow, etc. in the process industry. The technology tie-ups with internationally reputed manufacturers have brought in technological breakthrough in various areas of industry. Present technology of process control system is microprocessor based centralised control system. Future technology is for decrease in the sensing and response time of the equipment and greater automation control, i.e., without manual interference. The production for the year 2006-07 in the non-SSI sector is reported to be Rs. 326.03 crore. During 2007-08 (upto December 2007), it was reported at Rs. 289.01 crore. There has been export for Rs. 201.1 crore against import of around Rs. 1231.1 crore during 2006-07. The Industry has been delicensed and is eligible for 100 per cent FDI under the automatic route.
- Seamless Steel
Pipes and Tubes:- They come in all kinds of sizes including thin, small, precise, slender and other special pipes as well as in different forms such as hot rolled cold drawn, turned, rotorolled, etc. They have applications in aircraft, missile, nuclear power plants and anti friction bearing, etc. Ultra high strength and corrosion-resistant properties make these perfect for oil and gas industry, steam boilers, chemical and other processing industries, pipelines, installation with high and supercritical steam conditions, etc. Oil sector accounts for around 60 per cent of total requirement of seamless pipes. Bearings and boiler sector contribute around 30 per cent of demand. The industry is able to manufacture tubes up to 14” outer diameter. With upcoming substantial growth in the power sector and increase in demand of bearings from automobile sectors, the demand pattern may change in favour of these two sectors. The approximate export and import figures of the seamless steel pipes and tubes industry for the year 2006-07 were Rs. 1192.4 crore and Rs. 2646.5 crore, respectively. The industry has been delicensed and upto 100 per cent foreign equity is allowed for the manufacture of this item under automatic route.
- Electrical Resistance Welded (ERW) Steel Pipes and
Tubes:-Based on the end-user customers requirement, ERW steel pipes
and tubes are available in various qualities, wall thickness and diameters
of the finished pipes. While manufacturing ERW steel pipes, high quality
continuous-cast, fully-kilned, control-rolled, fine-grain and low-carbon
steel is used. High performance ERW steel pipes and tubes possess high
corrosion resistance, high deformability, high strength and high toughness.
These pipes are used in fencing, lining pipes, oil country tubulars,
scaffolding, water and gas conveyance, structural, engineering purposes,
etc. There has been tremendous increase in the production of ERW steel
pipes due to higher demand in oil and gas industry, infrastructure and
automobile uses. There are large numbers of units in the SSI sector.
The industry has been delicensed and is eligible for automatic approval
up to 100 per cent FDI.
- Submerged-Arc Welded (SAW) Pipes:- There are two types of SAW pipes namely longitudinal and helical welded SAW pipes. Longitudinal SAW pipes are preferred where thickness of pipe is more than 25 mm and in high pressure gas pipe line. While, helical welded SAW pipes are used for low pressure applications. The cost of helical SAW pipes is less than longitudinal pipes. Total installed capacity of SAW pipes in the country is around 6.5 lakh tones. There is huge demand of SAW pipes in the country due to transportation of oil and gas and transmission of water. The approximate export and import figures of the SAW pipes industry for the year 2006-07 were Rs. 2903.8 crore and Rs. 3844.2 crore, respectively. This industry has very good export potential. It has been delicensed and upto 100 per cent foreign equity is allowed for the manufacture of this item under automatic route.
- Industrial Fasteners:- The fastener industry in India may be classified into two segments, namely, high tensile and mild steel fasteners, which broadly include nuts, bolts, studs, rivets and screws. All types of fasteners except high tensile and special type of fasteners are reserved for SSI Sector. Mild steel fasteners are primarily manufactured by the unorganised sector, while high tensile fasteners require superior technology and are dominated by companies in the organized sector. Fasteners are used in almost all engineering and chemical industries. Automobile industry accounts for bulk of the total demand. Consumer durables and railways are the other primary users of the high tensile fasteners. The approximate export and import figures of the industrial fastener industry for the year 2006-07 were Rs. 886.9 crore and Rs. 819.5 crore, respectively. The production of nuts and bolts in the organized sector for the same year has been 90,629 tonnes. During 2007-08 (upto December 2007), it was reported at 66,772 tonnes. There is scope for more export in this sector. The fastener industry has been delicensed and is eligible for 100 per cent FDI under the automatic route.
- Steel Forging Industry:- Forging is the product of work on plastic state of metal to a desired shape by application of pressure. The working of metal into the shape by means of modern forging methods refines the grain structure, develops its inherent strength, improves the mechanical properties and produces the structural uniformity free from hidden internal defects. Forgings are produced through various methods which include open die forging, closed die forging and near net shape/precision forging. The Indian forging industry has emerged as a major contributor to the manufacturing sector of the Indian economy. The key driver of demand of forging is the automobile industry. About 65 per cent of the total forging production is used in this sector. The other Industries that use forgings include Railways, Defence, Oil Exploration, Cement, Steel Industry and other Engineering Industries. India’s forging industry not only meets almost the entire domestic demand of forgings but is also a large exporter and is making a significant contribution to India’s exports. The indigenous industry constitutes of about 10 large units followed by large number of medium, small and tiny units. The approximate import and export figures of the forging industry for the year 2006-07 were Rs. 1123.1 crore and Rs. 1533.5 crore, respectively. The production of stamping and forging for the same year in the organized sector has been 4,16,566 tonnes. During 2007-08 (upto December 2007), it was reported at 3,52,662 tonnes. The industry has been delicensed and is eligible for 100 per cent FDI under the automatic route.
- Bicycle Industry:- India is the second largest bicycle producer of the world. It has seen a tremendous increase in the number of bicycle manufacturers and bicycle exporters in the recent past. Today, Indian bicycle manufacturing and bicycle spares industry is well accepted and is also widely recognised for its quality standards in the international market. Most of the bicycle components and bicycle parts in India, except free wheels and single piece bicycle hubs are manufactured by the small scale sector. The large scale units are permitted to manufacture bicycle frames, chains and rims for their captive consumption. There is a significant scope for export of Indian bicycles, bicycle spare parts and bicycle accessories. The approximate export and import figures of bicycle for the year 2006-07 were Rs. 133.7 crore and Rs. 31.7 crore, respectively. The total production of all kinds of bicycles in the organized sector has been 105.98 lakh numbers during the same year. During 2007-08 (upto December 2007), it was reported at 81.13 lakh numbers. The industry has been delicensed and is allowed 100 per cent FDI under automatic approval.
The initiatives and measures taken by
the Government for the overall expansion of all these sub-sectors, along
with the establishment of new private units therein, has resulted in higher
growth for the light engineering industry. This trend has been continuing
due to the increased sector's usage in almost all major industrial groups
in the country as well as initiation of many new projects for infrastructure
development like power, railways, roadways, etc. The light engineering
industry is vital for manufacturing various final products and improving
the quality of life of the people. It holds immense potential for accelerating
the pace of development of country and thus offers innumerable opportunities
for the investors the world over.