ELECTRICAL MACHINERY
- Electrical equipment market production is estimated to touch $100 Bn by 2022 from $27.3 Bn in 2017-181
- The sector contributes about 8% to the manufacturing sector in terms of value, and 1.5% to overall GDP.2
- India’s vision is to reach $100 Bn by 2022 is completely in-line with the current market forecasts2
- The sector is projected to provide employment, both directly and indirectly, to 3.5 Mn people by 2022.2
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DE-LICENCING
The electrical machinery industry has been de-licensed, along with 100% FDI allowed in this sector. This has facilitated the entry of major global players into the electrical machinery industry in India.30
VISION 2022 FOR THE INDIAN ELECTRIC MACHINERY EQUIPMENT INDUSTRY
To make India as a preferred country for production of electrical equipment. It also aims to achieve an output of $100 Bn by balancing the trade deficit.31
Areas of focus include: - Technology and R&D - Lowering of customs duties on a range of equipment - Setting up of the Electrical Equipment Skill Development Council (EESDC) - Establishment of electrical equipment industry clusters - Enhancement of product-testing infrastructure in the country - Provide credit support to economically less-developed export markets.32
TAX DEDUCTION FOR IN-HOUSE R&D CENTRE
A weighted tax deduction of 200% under Section 35 (2AB) of the Income Tax Act for both capital and revenue expenditure incurred on scientific research and development. Expenditure on land and buildings are not eligible for deduction.33
STATE INCENTIVES
Apart from the above, each state in India offers additional incentives for industrial projects. Incentives are in areas like subsidised land cost, relaxation in stamp duty, exemption on the sale/lease of land, patent subsidy, power tariff incentives, a concessional rate of interest on loans, investment subsidies/tax incentives, backward areas subsidies, special incentive packages for mega projects, etc.
EXPORT INCENTIVES
Various incentives are provided under Export Promotion Capital Goods scheme, Duty Remission scheme, Focus Product scheme, Special Focus Product scheme, Focus Market scheme.
SKILL DEVELOPMENT
Steps taken for Skill Development, such as setting up of Electrical Equipment Skill Development Council (EESDC), would help to bridge the skill gap required for critical manufacturing. It has a clear objective to enhance exports.34
AREA-BASED INCENTIVES
The government approved 15 SEZs for the engineering sector, and electrical machinery is a part of the sector. Further, development of Delhi –Mumbai Industrial sector is expected to provide a big boost to the engineering sector.35
- Generation Equipment: Boilers, Turbines, Generators
- Transmission Equipment: Transformers
- Distribution Equipment: Switch Gears, Controls
- Others: Electrical Motors, Wires and Cables
- MHI (Japan)
- Hitachi (Japan)
- Babcock (UK)
- Alstom (France)
- Toshiba (Japan)
- Ansaldo (Italy)
- Colfax Corporation (USA)
- Schneider Electric (France)
- Legrand (France)
- GE (USA)
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