India’s emergence as a global hub for precision manufacturing & sourcing has been driven by its technical capabilities, skilled workforce, cost advantages, and enabling government policies. With a need for highly accurate components and systems with tight tolerances, fine finishes, and high reliability, precision manufacturing serves various sectors, including aerospace, automotive, defence, electronics, consumer goods, healthcare and more. Remarkably, CNC (Computerised Numerical Control) machines now account for around 85% of the machine tools industry output.
The industry splits into two major sectors: automotive(52%) and non-automotive (48%). The automotive sector is on a robust growth trajectory, with OEM demand - 62% of auto component needs—expected to achieve a 14% CAGR until FY26 driven by production increases and price realizations. Auto component exports are also set to grow by 7-9% from FY24-29, propelling the precision machining market to a 12% CAGR. Aerospace and defence, the second-largest consumer of precision engineering contribute nearly 20%, also shows strong potential. The Indian Aerospace and Defence market, valued at USD27 billion in 2024, is projected to double by 2033. The diversity of end user industries allows India’s precision engineering sector to provide resilient performance. India boasts a pool of highly skilled engineers and technicians, and the continuous emphasis on education and vocational training can ensure a steady supply of talent.
Government initiatives like Make in India, and Production Linked Incentive (PLI) schemes are major growth drivers. The PLI scheme encourages 100% FDI with an expected capex of INR 2.5-3 lakh crore, while Make in India promotes substantial investments in domestic manufacturing. Additionally, the China +1 strategy, spurred by supply disruptions during the pandemic, is drawing global companies to diversify supply chains by sourcing from India.
With robust sectoral growth and supportive policies, the future of precision manufacturing in India is exceedingly promising.
Please refer to our LinkedIn carousel at: https://www.linkedin.com/feed/update/urn:li:activity:7207252424066027520
#PrecisionManufacturing #CNC #AutomotiveIndustry#Aerospace #MakeInIndia #PLI #ManufacturingGrowth #Innovation #AscertisCredit
June 14, 2024