The economy of India is characterized as a middle-income developing market economy. It is the world’s fifth-largest economy by nominal GDP and the third-largest by Purchasing Power Parity (PPP). Since the start of the 21st century, annual average GDP growth has been 6% to 7%, and from 2014 to 2018, India was the world’s fastest-growing major economy, surpassing China.
The buoyant demand for power, light, and communication (data and voice) has provided a fillip to India’s wire and cable industry and electrical equipment business. Industry estimates point to an exciting increase in the share of the organized sector. The Indian wire and cable industry is transitioning away from the unorganized space with small players towards the organized sector consisting of pan-India branded players. The rapid growth of the organized sector has led to the expansion of the market size.
The steady rise in consumer spending augurs well for the growth of the wire and cable industry in India. India’s population is estimated to rise to 1.5 bn by 2030 (UN Population Division estimate). The country’s private final consumption expenditure (PFCE), a measure of consumer demand, is also rising. The increasing propensity to spend, a steady rise in per capita income and growing urbanization as population rises betoken a bright future for the industry.
According to Institute for Energy Economics and Financial Analysis (IEEFA), India’s gross domestic product (GDP) will double over the next 10 years, growing at a rate of 7 percent per annum. Over this period, the demand for electricity is expected to nearly double. This growth rate will further push the growth of the Wire and Cable Industry in India, which has already hit around EUR 6 Bn in 2021.
The wire and cable market in India, which comprises nearly 40 percent of the electrical industry, is growing at a CAGR of ~5 percent – thanks to the growth of the power and infrastructure sectors. The recent policy and regulatory initiatives and government schemes like Ujwal Discom Assurance Yojana (UDAY), Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), Integrated Power Development Scheme (IPDS) and Pradhan Mantri Sahaj Bijli Har Ghar Yojana have given the market a major boost. It may be mentioned that under DDUGJY, the government has envisaged the electrification of all villages.
Growing Infrastructure
The Indian Wires and Cables Manufacturing Machinery Market have seen steady growth in the past few years. The industry was impacted during the covid-19 pandemic, with a decrease in demand by 8.97% YoY. However, the industry started recovering in 2021 and is expected to reach the pre-covid size in 2023. India’s Wire and Cable Manufacturing Machinery Market is valued at EUR 602 Mn in 2022 and is projected to grow by 4.34% CAGR during the next five years.
With the outlay of EUR 32 Bn announced by the government for the five years ending 2022, the Transmission and Distribution sector is all set to remain in focus for quite some time. There is also a greater focus on high voltage transmission lines along with the government’s aims to provide 24×7 power, which is creating excellent opportunities in the sector. The DISCOMS that have joined the UDAY scheme are expected to improve their T&D infrastructure through renewed investments. The government’s target of generation of 100 GW of solar energy by 2022 and measures like excise duty exemption for Ferro silicon magnesium used for manufacturing components of wind-operated electric power generators have also increased the demand for electrical wires and cables.
In addition, the government’s ‘Smart City’ project is expected to promote large-scale growth in infrastructure, telecom, power generation, T&D, engineering and automotive sectors. This is good news for the wire and cable industry because growth of the industry is directly linked to the growth and development taking place in other sectors.
Global investors now consider India as a potential market for high voltage (HV) and extra high voltage (EHV) cables. These investors increase their investments in the Indian cable market through technical collaboration with Indian cable manufacturers for the production of EHV cables up to 400 kV. With an increasing focus on renewables, the industry is now looking forward to supplying cables for solar and wind power applications in addition to oil and gas, railways and other specialized segments. As per Indian Electrical and Electronics Manufacturers Association (IEEMA), Indian power cable manufacturers have attained maturity in terms of technology for HV cable up to 220 kV and have been found competitive in the global scenario, despite having higher local costs, as well as local taxes and duties being paid on their products.
In addition, electric vehicles (EVs) are expected to drive growth for cables and wires firms in a big way. There will be an increased demand for wires and cables when the acceptability of EVs picks up. Some amount of wire will also be required to set up EV charging infrastructure.
The Government’s impetus on infrastructure sectors such as power, railways, roads and petrochemicals will in turn, spur demand for more power and hence more power cables. Growing market potential, the increased adaption of new technologies by the utilities, growing importance of services that may be linked to digital technologies have widened the scope for the growth of the wire and cable industry in India.
Opportunities for wires and Cables Machine Manufacturers
The growth in end-use industries, such as Telecom, Power, Automotive, Construction etc., is driving the demand for wires and cables in India. This will increase the demand for Wires and Cables manufacturing machinery in India.
The wires and cables market in the world and in India is highly fragmented, with a number of small and medium enterprises. The organized sector manufactures durable high-voltage cables, whereas the unorganized sector mainly captures the low-voltage market, where products are mainly separated based on price. Most SMEs procure the wires manufacturing machinery from the local manufacturer. There are ample opportunities for firms to enter the Indian market by developing these SMEs as clientele. (5200 plus MSME (as per udyam NIC 273))
Key Trends in Wire and Cable Industry
In response to and anticipation of the changing market trends, the cable and wire manufacturing industry has the opportunity to expand and enhance many key operations, including in regard to:
Fast-charging Cables: Newer smartphone technology integrates fast-charging components, which necessitates the use of fast-charging cables. By using these cables, consumers significantly reduce charging times (to approximately 30 minutes), a quality that may help smartphone manufacturers offload more phones to new customers.
Fire-resistant Cables: Fire-resistant cables limit both the spread of fire and the release of toxic gas. As the construction industry grows, these cables will find increasing use in new large residential, commercial, and manufacturing buildings.
Fiber Optic Cables: By 2027, the value of the segment is expected to grow at a CAGR of 6.2%—a trend largely attributed to the increasing demand among end-users involved with communications and telecommunications applications.
Factory Automation Cables: The push for the integration of Industry 4.0 technology has led—and will continue to lead—to the adoption and installation of increasingly complex equipment and systems. The demanding environments these products are exposed to necessitate the use of durable and reliable components, including cables. The cables used must withstand stresses, such as abrasion, bending, and fast operating speeds.
Green Initiatives: As awareness builds around environmental protection and sustainability, more people are striving to reduce the emission of potentially hazardous chemicals and increase the use of natural and recycled/recyclable products. One effect this initiative has had on consumers is rapid growth in the demand for hybrid and electric vehicles. As this market continues to expand, so too does the need for wires, cables, and wire harnesses to outfit the cars.
Import Export Analysis
Wire & Cable
- India’s total imports of Wire & Cable in 2021 (€2.3 Bn) have gone up 42.49% from 2020 and down by 40.94% from 2019. Import from Italy increased by 50.73% in 2021 compared to 2020.
- In 2021, India’s exports grew by 41.52% compared to 2020, specially to USA, UK & Qatar.
- The top 5 countries contribute 65.47% of total imports and 63% of total exports.
Wire & Cable manufacturing machines
- India’s total imports of Wire & Cable manufacturing machines in 2021 (€141.58 Mn) have gone up 4.61% from 2020 and down by 38.26% from 2019. Import from China increased by 29.17% in 2021 compared to 2020.
- Italy is the second largest exporter of Wire and Cable manufacturing machines to India.
- In 2021, India’s exports grew by 52.44% compared to 2020, specially to Bangladesh, Kenya and Nepal. The top 5 countries contribute 72.13% of total imports and 50.9% of total exports.
Industry Stats
- The total number of factories have been decreased over the period, but the total productive capital is showing an increasing trend. An increase in investments in existing factories might have contributed to the same.
- Also, the value of output per factory has also increased by 60% in the Yr. 2019-20 as compared to Yr. 2014-15.
- Net profit shows an increasing trend, at a 23% CAGR during 2014 to 2020.
- The manpower involved has increased at 5% CAGR during 2014 to 2020.
- Material consumed has increased at a 4% CAGR whereas total outputs have increased at a 7% CAGR during 2014 to 2020.
- Wire & Cable Manufacturing Clusters In India – The Wire & Cable industry is located mainly in and around Delhi, Noida, Bhiwadi-Noida (National Capital Region) Faridabad, Haryana, and various parts of Maharashtra, Delhi, Rajasthan, and Daman, Silvassa Gujarat.
- The total number of factories have been decreased over the period, but the total productive capital is showing an increasing trend. An increase in investments in existing factories might have contributed to the same.
- Also, the value of output per factory has also increased by 60% in the Yr. 2019-20 as compared to Yr. 2014-15.
- Net profit shows an increasing trend, at a 23% CAGR during 2014 to 2020.
- The manpower involved has increased at 5% CAGR during 2014 to 2020.
- Material consumed has increased at a 4% CAGR whereas total outputs have increased at a 7% CAGR during 2014 to 2020.
- Wire & Cable Manufacturing Clusters In India – The Wire & Cable industry is located mainly in and around Delhi, Noida, Bhiwadi-Noida (National Capital Region) Faridabad, Haryana, and various parts of Maharashtra, Delhi, Rajasthan, and Daman, Silvassa Gujarat.