Indian Fastener Industry | FASTENER EURASIA MAGAZINE
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Fastener Market in India

India, a South Asian nation, is the seventh-largest country by area, the second-most populous country with over 1.33 billion people, and the most populous democracy in the world. India boasts of an immensely rich cultural heritage including numerous languages, traditions and people. Huge population, mostly comprising the youth, is a strong driver for demand and an ample source of manpower.

Manufacturing

Manufacturing has emerged as one of the high growth sectors in India. Prime Minister of India, Mr Narendra Modi, had launched the ‘Make in India’ program to place India on the world map as a manufacturing hub and give global recognition to the Indian economy. India is expected to become the fifth largest manufacturing country in the world by the end of year 2020.

The Gross Value Added (GVA) at basic current prices from the manufacturing sector in India grew at a CAGR of 4.34 per cent during FY12 and FY18 as per the second advance estimates of annual national income published by the Government of India. During April-September 2018, GVA from manufacturing at current prices grew 14.8 per cent year-on-year to Rs 138.99 trillion (US$ 198.05 billion). Under the Make in India initiative, the Government of India aims to increase the share of the manufacturing sector to the gross domestic product (GDP) to 25 per cent by 2022, from 16 per cent, and to create 100 million new jobs by 2022. Business conditions in the Indian manufacturing sector continue to remain positive.

With the help of Make in India drive, India is on the path of becoming the hub for hi-tech manufacturing as global giants such as GE, Siemens, HTC, Toshiba, and Boeing have either set up or are in process of setting up manufacturing plants in India, attracted by India's market of more than a billion consumers and increasing purchasing power.
Cumulative Foreign Direct Investment (FDI) in India’s manufacturing sector reached US$ 76.82 billion during April 2000-June 2018.

India is an attractive hub for foreign investments in the manufacturing sector. Several mobile phone, luxury and automobile brands, among others, have set up or are looking to establish their manufacturing bases in the country.
The manufacturing sector of India has the potential to reach US$ 1 trillion by 2025 and India is expected to rank amongst the top three growth economies and manufacturing destination of the world by the year 2020. The implementation of the Goods and Services Tax (GST) will make India a common market with a GDP of US$ 2.5 trillion along with a population of 1.32 billion people, which will be a big draw for investors.
With impetus on developing industrial corridors and smart cities, the government aims to ensure holistic development of the nation. The corridors would further assist in integrating, monitoring and developing a conducive environment for the industrial development and will promote advance practices in manufacturing.


Automotive Industry

India is expected to be the world's third-largest automotive market in terms of volume by 2026.
The industry currently manufactures 25 mn vehicles, of which 3.5 mn are exported. India holds a strong position in the international heavy vehicles arena as it is the largest tractor manufacturer, second-largest bus manufacturer and third largest heavy trucks manufacturer in the world.

Sale of passenger vehicles has increased by 2.7%, two-wheeler by 4.86% and three-wheeler by 10.27% during 2018-19 viz-a-viz 2017-18. In April-March 2019, overall automobile exports grew by 14.5%. The overall Commercial Vehicles segment registered a growth of 17.6% in April- March 2019.

The sector attracted $ 22.4 bn FDI during April 2000 - June 2019; accounting for 5.1% of the total FDI inflows.

Auto Components Industry

The Indian auto-components industry has experienced healthy growth over the last few years. The auto-component industry of India has expanded by 18.3 per cent to reach at a level of US$ 51.2 billion in FY 2017-18.
The auto-components industry accounts for 2.3 per cent of India’s Gross Domestic Product (GDP) and employs as many as 1.5 million people directly and indirectly each. A stable government framework, increased purchasing power, large domestic market, and an ever increasing development in infrastructure have made India a favourable destination for investment.

The total value of India’s automotive exports stood at US$ 13.5 billion in 2017-18 as compared US$ 10.9 billion in the year 2016-17. This has been driven by strong growth in the domestic market and increasing globalisation (including exports) of several Indian suppliers.

The Indian auto-components industry is set to become the third largest in the world by 2025. Indian auto-component makers are well positioned to benefit from the globalisation of the sector as exports potential could be increased by up to US$ 30 billion by 2021E.

According to the Automotive Component Manufacturers Association of India (ACMA), the Indian auto-components industry is expected to register a turnover of US$ 100 billion by 2020 backed by strong exports ranging between US$ 80- US$ 100 billion by 2026.

Steel Industry

India was the world’s second-largest steel producer with production standing at 106.5 MT in 2018. The growth in the Indian steel sector has been driven by domestic availability of raw materials such as iron ore and cost-effective labour.

India’s finished steel consumption grew at a CAGR of 5.69 per cent during FY08-FY18 to reach 90.68 MT.
India’s crude steel and finished steel production increased to 103.13 MT and 104.98 MT in 2017-18, respectively.
In 2017-18, the country’s finished steel exports increased 17 per cent year-on-year to 9.62 million tonnes (MT), as compared to 8.24 MT in 2016-17. Exports and imports of finished steel stood at 0.72 MT and 1.12 MT, respectively, in FY20P(up to May).
The National Steel Policy, 2017, has envisaged 300 million tonnes of production capacity by 2030-31.

Construction Sector

The Construction industry in India consists of the Real estate as well as the Urban development segment. The Real estate segment covers residential, office, retail, hotels and leisure parks, among others. While Urban development segment broadly consists of sub-segments such as Water supply, Sanitation, Urban transport, Schools, and Healthcare.

•    By 2025, Construction market in India is expected to emerge as the third largest globally
•    By 2025, Construction output is expected to grow on average by 7.1% each year
•    By 2020, Construction equipment industry’s revenue is estimated to reach $ 5 bn

Engineering

The Indian Engineering sector has witnessed a remarkable growth over the last few years driven by increased investments in infrastructure and industrial production. The engineering sector, being closely associated with the manufacturing and infrastructure sectors, is of strategic importance to India’s economy.

The Government of India has appointed the Engineering Export Promotion Council (EEPC) as the apex body in charge of promotion of engineering goods, products and services from India. India exports transport equipment, capital goods, other machinery/equipment and light engineering products such as castings, forgings and fasteners to various countries of the world. 

India’s engineering R&D market will increase from US$ 28 billion in FY18 to US$ 42 billion by FY22F. Sales of construction equipment are expected to reach 90,115 and 100,000 in 2018 and 2022, respectively, while the market size of construction equipment industry is expected to grow from US$ 4.3 billion in FY18 to US$ 5 billion by FY20.
Production of machine tools industry is forecasted to increase to Rs 9,000 crore (US$ 1.40 billion) in 2018-19.


Metals & Mining Sector

India is home to 1,531 operating mines and produces 95 minerals – 4 fuel-related minerals, 10 metallic minerals, 23 non-metallic minerals, 3 atomic minerals and 55 minor minerals.  India is the 3rd largest producer of coal.  Coal’s share in India’s primary energy consumption is expected to be 48% in 2040.  India is the 2nd largest crude steel producer in the world, generating an output of 106.5 MT in 2018, a growth of 3.7% Y-o-Y. India’s steel consumption rose 7.5% Y-o-Y and 7.9% Y-o-Y over the last 2 years, outpacing a 2.1% to 5% growth globally. 

•    Over 2030-31, crude steel demand/production forecasted to reach 255 MT
•    Per capita finished steel consumption also expected to rise to 158 kg by 2030-31 (from 73.3 kg in 2018)

Renewable Energy

In 2019, India was ranked as the fourth most attractive renewable energy market in the world.
The country has set an ambitious target of 175 GW of renewable power by 2022, which includes: 100 GW of Solar power, 60 GW from Wind power, 10 GW from Biomass power and 5 GW from Small Hydro power. This is the world's largest expansion plan in renewable energy.

FASTENER MARKET IN INDIA

Asia-Pacific is the largest market for fasteners in these years, accounting for a major share of the fasteners manufactured globally. The major reason for this growth can be attributed to the increasing number of construction activities and growing automobile manufacturing in countries like China and India.
Owing to its application in diverse sectors, a wide range of fasteners are manufactured in the Indian market, which include exhaust bolts, balance wheel bolts, standard hexagon screws/bolts, socket head cap screws, socket shoulder screws, weld nuts, square nuts, hexagon nuts, self-tapping screws and others. With help from the Indian government’s ‘Make in India’ initiative, the Indian manufacturing sector is expected to generate huge demand for the industrial fasteners market.

The Indian industrial fasteners market is expected to reach a value of INR 460 Bn by 2023 expanding at a CAGR of ~9.6% from 2018. Fastener companies usually sell their products in India through various distribution channels- distributors, direct dealers, online channels and industrial events. De-licensing of the industry is facilitating the entry of major global manufacturers in the Indian market. The majority of fasteners that were imported by India in FY 2018 was other screws and bolts, whether or not with their nuts or washers followed by other non-threaded articles and threaded nuts.

The Indian industrial fasteners market is segmented on the basis of application, product type and the organization of the market. The Indian automotive sector is expected to be the largest consumer of industrial fasteners, accounting for a major share of the market by 2023. This will be because of owing to increased automotive manufacturing in the country. Increasing sale of automobiles in India is significantly driving the growth of the auto ancillary market in the country, including automobile sector-specific fasteners. Growing usage of fasteners for manufacturing automotive parts such as engines, chassis, moulding, suspension system and wheels among others, is expected to drive the growth of the Indian industrial fasteners market during the forecast period. It is followed by the construction and the engineering sector.

High-tensile fasteners are mainly used in the construction and engineering sector, whereas mild steel fasteners are used in manufacturing automobiles. Currently, there has been a shift in preference of manufacturing fasteners by using stainless steel, iron, brass, aluminium, nickel and plastics and composites.

Fasteners Association of India

Fasteners Association of India was incorporated in Early 2017 to formally represent as well as provide direction to the Indian Fastener Industry as the umbrella organisation. With a clear mission of providing services for improvement in skill, technology, business promotion and working for the betterment of the Fastener Industry in India especially manufacturers.

Sources: Research&Markets, Invest India, Ministry of Trade, ibef.org

Importing markets for fasteners exported by India 

Unit : US Dollar thousand

Importers

Exported value in 2017

Exported value in 2018

WORLD

487,956

579,393

USA

81,536

98,839

Germany

75,076

87,735

Netherlands

54,298

54,492

United Kingdom

47,040

52,555

UAE

37,324

49,629

Italy

31,715

31,339

Saudi Arabia

12,161

17,550

Spain

10,799

12,835

Poland

8,021

11,420

Qatar

6,143

11,248

France

8,569

10,214

Brazil

6,187

8,648

Nepal

4,924

7,435

Belgium

7,630

6,823

Bangladesh

4,652

6,646

Australia

4,800

6,016

S.Korea

3,211

5,326

Canada

3,551

4,846

Turkey

4,345

4,751

Nigeria

2,908

4,401

South Africa

4,297

4,384

Kuwait

3,790

4,253

China

3,500

3,931

Kenya

1,768

3,655

Oman

3,308

3,598

Source: Trademap

Supplying markets for fasteners imported by India   
Unit : US Dollar thousand

Exporters

Imported value in 2017

Imported value in 2018

WORLD

808,050

951,665

China

169,567

196,268

Germany

114,168

133,977

Japan

117,457

132,866

S.Korea

93,683

93,576

USA

58,618

66,851

Thailand

49,950

46,586

Taiwan

39,632

43,669

Italy

35,176

39,763

Singapore

9,874

39,046

United Kingdom

24,816

30,651

France

15,067

19,214

Belgium

2,205

12,007

Netherlands

3,144

10,343

Hong Kong

2,875

10,235

Sweden

6,496

10,200

Switzerland

8,894

7,981

Brazil

6,246

6,760

Spain

6,249

4,863

Denmark

1,730

4,777

Czechia

5,558

4,538

Turkey

3,992

4,429

UAE

2,248

4,389

Malaysia

3,739

4,105

Indonesia

4,655

4,086

Vietnam

2,041

3,965