Engineering India’s growth

Opportunities in the challenging times of Covid:

Five such mega engineering opportunities in India

Among new opportunities in various sectors are five mega engineering opportunities in India that have the potential to generate $300 bn in the next five years.
Apart from their direct contribution, these opportunities will help the extended ecosystem, including engineering service providers.
Once adopted, these technologies will have the potential to solve many challenges faced by the country in various sectors.

Electronics manufacturing:

Currently, India’s domestic production in the sector stands at $70 billion, accounting for just 3.3 % of the global market.
This gives the country lot of potential for future growth.

Electronics exports from the country can potentially grow from $11.28 billion in FY20 to $180 billion in 2025, as some estimates suggest.
Many nations such as the US, Japan, and South Korea are looking to shift their manufacturing supply chain from China; thus, India is likely to be a major beneficiary from such a migration.
Many electronics giants are looking at increasing investment in India.
Apart from smartphones, laptops & other electronic gadgets, there is opportunity in components & accessories such as charger, headphones, battery etc.

In June this year, India launched an incentive plan worth $6.65 billion to boost electronics manufacturing.
It will offer global smartphone makers incentives to establish or expand domestic production.
The country also plans to select five Indian firms for the PLI (production-linked incentive) scheme to produce smartphones and components worth $133 billion by 2025.
To cash in on the incentive structure, many 22 Indian and international firms have lined up with proposals for mobile phone production worth Rs 11 lakh crore over the next five years.

Water management:

India needs a robust water management strategy not only for drinking water but also for sustaining its agricultural growth.
Advances in technology can contribute a lot in attaining both these objectives.
The country will need a $100 billion investment in water in India in next five years as part of its “Nal Se Jal” scheme.
The investment will be in EPC, pipes, pumps, valves, cement water treatment plants and technology, desalination etc.
Smart water management itself will be huge:

Smart water products will include wireless sensor networks that gauge the flow and water quality, while enabling its efficient distribution in urban areas. As a result, various government agencies are likely to be the major users of IoT-enabled applications.
Globally, the market-size for smart water management is likely to be $21 billion by 2024— from about $12 billion as of now. India, with its vast water resources, contributes a significant share to this market size.

Defence manufacturing

India was the second-largest importer of foreign weaponry after Saudi Arabia during 2015-2019, accounting for 9.2% of the total global arms imports.
India is aiming to be increasingly self-reliant in defence manufacturing.
Under the “Atmanirbhar Bharat” initiative, the country has decided to ban the import of 101 weapons and platforms over the next seven years.

It includes major armaments such as artillery guns, assault rifles, corvettes, sonar systems, and transport aircraft.

These items, worth a total of $53.4 bn, are planned to be manufactured in India with local companies as prime contractors.
Further, with advanced technology playing a major role in the smart weapon development program, many Indian companies can be the major beneficiaries.

EV charging

Though the adoption of electric vehicles (EV) has been rather slow in India, it is receiving consistent support from the government for its future growth.
EV charging requirements will grow with EV adoption.
If EV adoption picks up, India will require about 4,00,000 charging stations by 2025.
This translates to about $20 billion in investments.
Charging stations in remote or rural areas will require complete energy systems of power backup, power quality, remote monitoring, and maintenance.
As EV adoption rises in the country, there are huge opportunities in this sector.

Data centres

5G-enabled emerging technologies such as the Internet of Things (IoT), AI, and ML will throw up a massive amount of consumer data that will require storage.
India’s banking sector regulator, RBI, has already made it compulsory for financial services institutions to store data locally.
Further, the proposed data localisation norm of India, which mandates the storage of personal data within the country, is another factor in driving demand.
These along with more new technologies are expected to create a massive data center ecosystem.

The data centre outsourcing market in India is estimated at around $2 billion as of now. This is projected to grow at a CAGR of 25% to touch $5 billion by FY24.
Currently, the top eight cities of India have 7.5 million square feet of space under various data centres. An additional 10 million square feet of space is expected to be added in the next three years.
This all again shows huge opportunities, with various large Indian firms sensing a business opportunity.
More than $15 billion of investment already committed in the next five years for setting up new data parks along with the expansion of existing ones.

Investments in these sectors will help many ancillary and supporting industries:

This engineering investment will have a trickle-down effect and will help many ancillary and supporting industries, like Engineering and R&D service providers.

Conclusion:

Mega investment opportunities as highlighted above are rare.
Thus, firms should take advantage of these with preparation, planning, and capability development.

Ayush Prakash