Manufacturing & Engineering


The Engineering Industry is considered to be of extreme strategic importance and a key driver of the Indian economy on account of the close relation it bears to the Construction Industry which is the second largest sector in the Indian Economy after agriculture and is responsible for the employment of a significant section of the population as well as the Infrastructure and Manufacturing Industries. Companies established in this sector range from power equipment manufacturers to companies providing alternative solutions to problems or difficulties faced by the engineering sector and companies specializing in the execution of engineering procurement contracts (EPC).

The Indian Engineering Industry is divided into the heavy engineering and the light engineering segments, with both growing at a substantial pace. The de licensing of the sector and permission for up to 100% FDI under the automatic route has sparked the interest of Global Investors and expectations are that the Industry will record a compound annual growth rate of 10.8% with the market size expected to reach 105 billion USD by 2022.

The lack of skilled manpower and availability of technologies creates a significant barrier to the entry of new companies looking to invest in the sector. Regulatory issues often result in the stoppage of many planned infrastructure projects. Besides regulatory issues, planned projects need also to obtain the requisite permissions and environmental clearances required for the project to get the go ahead and strictly adhere to the same.

The government of India has entered into agreements with a number of countries including Israel and Germany for development of hi tech defence systems and for identifying areas for potential future collaboration. The reduction in customs duty and the increased investment allowance for companies investing in new plants and machinery have been hailed as steps taken in the right direction. An emerging field in this Industry, off late has been Engineering Services Outsourcing, where countries lacking skilled workers outsource their engineering jobs to countries with the requisite skills. The increasing number of educational institutions providingsuch technical education and the overwhelming tendency of Indian youth to enter this industry as a profession have poised it to become a world leader in this segment.

The field of Engineering is typically characterized by a large number of contracts of different types entered into by different parties. Our firm applies a sensible and methodical approach to the creation and interpretation of contracts and strives to keep the best interests of our client at the heart of things while doing so.

The manufacturing industry is one of the key drivers of the economy in India. The Industry currently contributes around 15% to the GDP of the country but the government has set a goal for the country, aspiring for the sector to account for up to 25%of the GDP by 2025 and to make it a global manufacturing hub. To this end, the current government passed the Make in India initiative for the Automotive, Aviation, Biotechnology, Defence, Ports and Railway Sectors amongst others.

The said initiative seeks to push the growth of the manufacturing industry at a rate of 12-14% per annum in the medium term. It further aims at creating 100 million jobs in the sector by 2022 and the creation of specific skill sets among people living in rural areas to enable them to find employment in the said sector and encourage sustainable growth, especially with regard to the environment.

The objectives of the said initiative are to remedy the earlier sluggish growth in the sector, create domestic jobs and uplift people from poverty by providing them with non agricultural employment and inspire growth in infrastructure via innovative methods. The efforts being made to this end have resulted in a significantly changed outlook, reflected in the continuous improvements being seen in the sector. The Make in India website states that the National Manufacturing Authority is one of the most significant policies created by the government, and is the first to deal with all factors relevant to the growth of the sector including regulation, infrastructure, skill development, technology, availability of finance etc.

The mode of submission of returns has been simplified, with provisions for just one monthly/quarterly form that needed to be filled instead of the multitude that needed to be filled earlier. Timelines are now going to be provided for all clearances and the governments at both, the state and centre are to provide exemptions on regulations regarding labour, the environment etc.

Increased transparency, the lowering of barriers to entry and simplified regulations governing manufacturing coupled with Incentives being offered to companies Investing have the sector poised to reach previously unimagined heights.