India’s Capital Goods Sector Shows Strong Growth, Boosted by Government Support

India’s capital goods sector has witnessed consistent and encouraging growth over the past five years, supported by strategic government initiatives and rising industrial demand. Bhupathiraju Srinivasa Varma, Minister of State for Heavy Industries and Steel, said in the Rajya Sabha that the sector has shown remarkable progress across various sub-segments, including machine tools, dies and moulds, printing machinery, food and textile machinery, and heavy electrical equipment.

In financial year 2020–21, production across the sector was modest but has since grown steadily. For example, machine tool production increased from ₹6,602 crore in 2020–21 to an estimated ₹14,286 crore in 2024–25. Printing machinery production grew significantly from ₹10,058 crore to ₹29,716 crore in the same period. The most notable growth came from the heavy electrical equipment segment, which surged from ₹1.67 lakh crore to an estimated ₹3.72 lakh crore in just five years.

Currently, the capital goods industry contributes approximately 1.9% to India’s GDP, reflecting its importance to the country’s manufacturing ecosystem.

To further enhance the sector’s competitiveness, the Ministry of Heavy Industries launched the second phase of the “Scheme for Enhancement of Competitiveness in the Indian Capital Goods Sector” on January 25, 2022. With a total financial outlay of ₹1,207 crore, comprising ₹975 crore in government support and ₹232 crore from industry contribution, the scheme aims to strengthen technological infrastructure and skill development.

33 projects including 9 Centres of Excellence of (CoEs), 5 Common Engineering Facility Centres (CEFCs), 7 Testing and Certification Centres, 9 Industry Accelerators for technology development, and 3 initiatives to create skill-based Qualification Packs for higher skill levels have been approved under this scheme.

These efforts signal a clear policy direction to scale up India’s capital goods manufacturing base, align with global standards, and build a future-ready industrial ecosystem.

Source: PIB