The Indian forging industry has emerged as a major contributor to the manufacturing sector of the Indian economy. It is a key element in the growth of the Indian automobile industry as well as other industries such as general engineering, construction equipment, oil, gas, and power. The Indian forging industry is well recognized globally for its technical capabilities.
With an installed capacity of around 37.7 lakh MT, Indian forging industry has a capability to forge variety of raw materials like carbon steel, alloy steel, stainless steel, super alloy, titanium, aluminium, etc. The forging industry provides direct employment to about 95,000 people. The small and very small units are mainly dependent on manual labour; however, the medium and large units are more mechanized. Quality standards in the industry have improved significantly and the sector is now well-known globally for its high quality.
The current share of auto sector is about 61% of total forging production while the rest is with the non-auto sector. Changes in Indian automobile industry directly impact Indian forging industry because the forging components form the backbone of the Indian automobile industry. Since the automobile industry is the main customer for forgings, the industry’s continuous efforts in upgrading technologies and diversifying product range has enabled it to expand its base of customers to foreign markets.
The Indian forgings industry has made rapid strides and, currently, not only meets almost all the domestic demand but has also emerged as a large exporter of forgings. The industry is increasingly addressing opportunities arising out of the growing trend among global automotive OEMs (Original Equipment Manufacturers) to outsource components from manufacturers in low-cost countries. As a result, the industry has been making significant contributions to India’s growing exports.
The Indian forgings industry has played a significant role in the Indian economy with an estimated size of around INR 20,200 crore in FY13. Of this, approximately INR 4,500 crore was attributed to exports in the same year. It is safe to assume a growth rate of about 10 per cent for the industry from FY17 onwards. Business sentiment is improving in India and with that, in the coming years, we expect to see improved business activity, which will drive demand for forgings and give an impetus to exports.
The Modi government’s Make in India initiative is a good move in the right direction, which will boost the overall manufacturing sector. This initiative has created an all-round positive business environment and has been fruitful for a certain segment of the forging industry; we are anticipating an increase in demand from the non-auto sector in the medium to long term.