National Capital Goods Policy Aims To Raise Sector Exports To 40%

India's first national policy for the capital goods sector aims to make the country a net exporter of such products by raising the exports from the sector to 40 per cent from the current 27 per cent by 2025. The policy, which was announced by Anant Geete, minister, heavy industry and public enterprises, at the ongoing Make-in-India week in Mumbai on Monday (15 February), also expect to increase share of domestic production to at least 80 per cent of the country's capital goods demand by this period.

Key recommendations in the first ever policy include strengthening the existing schemes of the Department of Heavy Industries on enhancement of competitiveness of capital goods sector by increasing budgetary allocation and increasing its scope to further boost global competitiveness in various sub sectors, enhancing the export of Indian made capital goods through a 'Heavy Industry Export and Market Development Assistance Scheme (HIEMDA)', launching a technology development fund, upgrading existing and setting up new testing and certification facility, making standards mandatory in order to reduce sub-standard machine imports and at the same time providing opportunity to local manufacturing units by utilising their installed capacity and launching scheme of skill development for the capital goods sector.

Unveiling the policy recommendations, the minister said that the aim of the policy is to create game changing strategies for the capital goods sector. Some of the key issues addressed include availability of finance, raw material, innovation and technology, productivity, quality and environment friendly manufacturing practices, promoting exports and creating domestic demand.

"The capital goods sector is currently going through many challenges and issues and to address those challenges," the minister said adding that so the clear objective of the National Policy is to increase production of capital goods from the current Rs. 230,000 crore in 2014-15 to Rs 750,000 crore in 2025 and raising direct and indirect employment from the current 8.4 million to 30 million.

The Department of Heavy Industry had earlier set up a joint taskforce with Confederation of Indian industry (CII) as an attempt to ensure that formulation of the Capital Goods Policy is done in the most democratic manner and the recommendations being made carve a roadmap for capital goods that makes the sector a part of global value chains apart from mere supply chains. The policy has been framed after extensive stakeholders’ consultations with industry, academia, different ministries etc to finalize the key recommendations which will support and boost development of this crucial sector.

"Realising the strategic importance of capital goods and the pivotal role that it plays in overall manufacturing is also central to the vision of Make in India programme”, said Geete.

The policy also aims to facilitate improvement in technology depth across sub-sectors, increase skill availability, ensure mandatory standards and promote growth and capacity building of medium and small scale enterprises.

While appreciating the contribution of small scale industry towards the country's capital goods sector, Geete assured that the Ministry of Heavy Industries and Public Enterprises will hand hold the industry for building India as the world class hub for capital goods. "The need of the hour is to adopt and accept the latest technologies available across the World to promote capital goods sector and the country presently is the most secure destination for investments with adequate manpower," he said.

Meanwhile, Ministry of Heavy Industries and Public Enterprises had also facilitated several key memorandum of understandings (MoUs) for fresh investments in the sector during the Make in India week. These MoUs include the collaboration between Heavy Engineering Corporation (HEC) Ltd and CNIITMASH, Russia was for setting up a common engineering faculty centre for training at HEC, Ranchi, and a joint project between HEC and Paul Worth, Luxembourg for a new coke oven battery and refurbishing of coke oven machinery unit.