FDI In Capital Goods Sectors

The capital goods manufacturing sector facilitates engagement across sectors such as construction, engineering, infrastructure, consumer goods etc. Increasing demand has led to a notable growth in the capital goods sector of India. 100% FDI in Capital goods sector is allowed under the automatic route.

In order to encourage more FDI in the capital goods sector, the government of India has regularly eased policies.

The capital goods sector is further divided into sub-sectors, out of which, it is majorly dominated by the heavy electrical equipment sector.


Industry Scenario

Heavy Electrical Equipment: USD 24.2 bn

Process Plant equipment: USD 3.7 bn

Printing Machinery: USD 3.01 bn

Food Processing machinery: USD 2.4 bn

Dies, Moulds & Press Tools: USD 2.3 bn

Textile Machinery: USD 1.8 bn

Machine Tools: USD 1.4 bn

Plastic Machinery: USD 0.5 bn

Metallurgical Machinery : USD 0.4 bn


  • 1
    By 2025, direct & indirect employment expected to reach 5 mn and 25 mn respectively
  • 2
    Indian generation and T&D equipment market to reach USD 100 bn by 2022
  • 3
    Indian heavy electrical equipment is the largest sub-sector followed by process plant equipment and earthmoving & mining machinery



1. November 2017 - The Central government plans to spend USD 459.7 mn to implement various programs under the National Capital Goods Policy

2. February 2016 - One of the world's leading engineering machinery manufacturers, China's Sany Heavy Industry plans USD 9.8 bn of investments

FDI Facts

6.9bn FDI inflows (in USD) in electrical equipment during April 2000 - December 2017

4.7bn FDI inflows (in USD) in industrial machinery during April 2000 - December 2017

100% FDI is allowed under the automatic route in the electrical machinery sector