October 07, 2008

Indian ECE sector can expand 5 fold by 2015 –Report

According to a report called “ECE Vision 2015: Scaling New Heights in Indian Earth Moving and Construction Equipment Industry”, prepared by McKinsey for the Confederation of Indian Industry, the earth moving and construction equipment industry has the potential to expand 5 fold from the revenues of USD 2.3 billion in 2006 to USD 12 to USD 13 billion by 2015, with a significant export contribution.

Mr Rajat Dhawan partner of McKinsey & Company, while addressing media persons, said that “ECE industry could realize its potential by 2015 buoyed by significant infrastructure investment expected. This will boost the industry to USD 8 billion and an additional growth of USD 4 to USD 5 billion could be achieved by pursuing demand accelerators in the domestic and export market.” He added that exports itself could touch USD 3 billion with 50% of it supported largely by components supply while equipment and services will add up the rest.

The report added that however, the industry needs to launch 3 transformation initiatives that would help the industry on a sustainable growth path. The potential could be realized through a concerted effort by the industry players and the government to introduce India specific products, improves cost competitiveness to face impending competition from imports from low cost countries like China and push exports in areas where India has an edge.

The McKinsey report said that various estimates indicate an investment of a USD 1 trillion over the next eight years in infrastructure. It added that “Even after discounting for delays and discontinued projects, the potential investment could approximately be USD 750 billion between 2007 and 2015, going by the historical trends and assessment of industry experts.”