Govt initiatives to boost cable industry in India
The industry which has been growing at the rate of around 15 per cent currently will start growing at the CAGR of over 20 per cent over the next five years.
The wires and cables industry in India has come a long way, growing from being a small industry to a very large one, over the past decade.The increasing demand for power, light and communication has kept demand high for wire and cable. This trend will continue as demand for reliable, efficient energy and data communications will strengthen the wires and cables industry in the future as well.
Over the last 20 years, the industry has shifted from being an unorganised sector to an organised one. Still, 35 per cent of the industry continues to be a part of the unorganised sector. In India, the size of the cable manufacturing industry is approximately Rs 40,000 crores.
The specialised cable industry is roughly of the size of Rs 10,000 crores. The government has announced ambitious plans for infrastructure development. One of the primary focus area of the development plan is railways, with over Rs 800,000 crore as promised investment over the period of 2015-2020.In addition, the government has ear marked Rs 50,000 crore (US$ 7.53 billion) to develop 100 smart cities across the country.
High way projects worth $93 billion, which include government flagship National Highways Building Project (NHDP) with total investment of $45 billion over next three years, have also been announced. The Dig ital India campaign will require an investment of Rs 4,50,000 crore. Ministry of Power is also looking at an investment of Rs 15,000 lakh crore over the next 5 years.
The wire and cable industry will eventually focus on supplying cables for specific applications pertaining to the industry needs.
India has a lot of potential in the mining, power, oil and gas, metro railways, cement industry, steel industry and other sectors. Power cables, a critical segment of the power sector, is experiencing an escalating demand owing to the growth in power generation infrastructure. India is one of the biggest consumers of electric energy after the US and China.
Accelerated urbanization and growing concern over pollution have increased the investment in metro rails for urban mass transportation. The country is predicted to develop metro rails in at least 50 cities across India.Such developments where each project requires more than $150 million is likely to attract many Indian and foreign companies to take advantage of the huge growth opportunities.
Different kinds of cables like extra high voltage cables, elastomer cables, etc are presently being used for special applications such as mining, in oil sector, shipbuilding, cranes, elevators, solar power plants to harness power for new generation motor vehicles, windmill solutions as well as security systems.
The growth in renewable power generation would be one of the primary factors for the growth of the electric cable and wire market. The focus of several countries across world to commercialize renewable power generation will create a significant demand for electrical wires and cables. This is mainly due to the lack of a transmission and distribution (T&D) infrastructure at locations where renewable energy resources are set up.Moreover, the expansion of the existing renewable power generation plants in the emerging countries will also result in increasing the demand for electrical wires and cables.
Initiatives such as excise duty exemption for ferro-silicon magnesium and pig iron used for manufacturing components for wind-operated electric power generators, and the target set by the Jawaharlal Nehru National Solar Mission to generate more than 1,00,000 MW of solar power by the end of the year 2022, will boost the demand for electrical wires and cables.
Rural electrification is another major factor which is expected to propel the growth of the electric wire and cable market in the country. The government’s goal to provide electricity to every home by 2020 should attract major investments in the sector.