India exports its engineering goods predominantly to the US and Europe, comprising over 60 per cent of total exports. Recently, exports to Japan and South Korea have risen by 16 and 60 per cent respectively. Sri Lanka, Nepal, and Bangladesh have also emerged as significant destinations for India’s engineering products.
The Indian engineering sector commands substantial interest from foreign investors due to its comparative advantage in manufacturing costs, technology, and innovation. Combined with favourable regulatory policies and robust manufacturing growth, this has attracted considerable foreign investment.
FDI inflows into India’s miscellaneous mechanical and engineering industries have strengthened sectoral development.
Key growth drivers over the past decade include:
- India’s Labor cost advantage
- Preferred outsourcing destination
- 100% FDI permitted in construction and development projects and select key sectors
- De-licensing, removal of tariff protection, and SEZ promotion
Governments globally monitor the engineering sector to align with projected GDP. In both developing and developed economies, supply, services, and capital-intensive goods require precise timing and periodic reviews.
Political support and public backing enhance project viability through favourable long-term interest rates for developers and investors.
Constant innovation, evolving supplies and policies, declining interest rates, international collaborations, and sourcing delays make the engineering sector highly competitive and sensitive, necessitating accurate forecasting of dynamic parameters and bottlenecks.
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