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Process equipment industry: Forging India's industrial future
Articles- Sep 27,25
Localisation, advanced technologies, and workforce upskilling will define the Indian process equipment industry’s next phase of growth, says Sanjay Gulati, Manufacturing Head and Whole Time Director, Isgec Heavy Engineering Ltd.
The Indian process equipment sector is experiencing robust domestic demand, driven by a substantive growth in the energy and chemical sectors, which we believe will continue for the next decade or so. According to the Ministry of Heavy Industries, domestic production exceeded Rs 270 billion in 2023-24. However, the industry still faces a significant challenge of rising imports. With imports climbing steadily from Rs 46 billion in 2019-20 to Rs 69 billion in 2023-24, there is a clear opportunity for domestic manufacturers to innovate and develop import substitute equipment.
Despite this robust demand, we face several headwinds. The sector grapples with the limited availability of domestically produced special steels, which are crucial for high-end manufacturing. We also contend with intense competition from cheap imports, high input costs for power and finance, and complex logistics. Furthermore, ongoing geopolitical conflicts and disruptions in global supply chains present a continuous set of challenges.
The Indian government's proactive policy reforms are creating a more favourable environment for domestic manufacturers. Initiatives like Make in India, recent GST reforms, ease of doing business and various Quality Control Orders are simplifying business operations and boosting domestic production. The latest GST reforms are expected to have a multiplier effect, stimulating broader manufacturing activity and, in turn, increasing demand for capital goods. While the ongoing US-China trade war and tariffs may not directly impact us, the China plus one strategy presents a significant opportunity. Global clients are increasingly looking to diversify their supply chains away from China.
Future of process equipment industry
The future of the process equipment industry will be fundamentally different from its past. We recognize that the next decade will be defined by shifts in demographics, a growing emphasis on localization, and the rapid adoption of new technologies.
Demographic shifts and labor: The global workforce is evolving, and we are witnessing a growing skill gap and a move away from traditional manufacturing roles. Younger generations are seeking different career paths, and this creates a challenge for industries that have historically relied on a large, skilled labor pool. The future of manufacturing will require fewer but more highly skilled technicians who can manage complex automated systems, rather than many manual laborers. Companies will need to invest in training and upskilling their workforce to handle advanced robotics, data analytics, and AI-driven processes.
Localization and geopolitical realignment: Recent global events have highlighted the vulnerabilities of long, complex supply chains. The pandemic and geopolitical tensions have accelerated a trend towards localization. Companies and governments are now prioritizing regional and domestic manufacturing to ensure stability and reduce dependency on foreign suppliers. This presents a huge opportunity for the domestic Process Plant industry. Especially with the strengthening of India's industrial base and the Make in India policy, there is a strong domestic demand for high quality, locally produced equipment and a reliable alternative for international clients looking to diversify their supply chains, a trend often referred to as China plus one.
Adoption of new technologies: The third and perhaps most profound shift is the integration of new technologies. The traditional model of manufacturing is being revolutionised by the convergence of the digital and physical worlds. AI and Automation, The Internet of Things (IoT), Digital Twin Technology etc. are completely altering the manufacturing landscape making it more efficient and creating a more resilient, innovative, competitive industry.
I believe that by proactively embracing these changes, the industry can continue to be a significant contributor to India's growth story.
About the author
Sanjay Gulati is the Manufacturing Head and Whole Time Director at Isgec Heavy Engineering Ltd.
Sanjay Gulati
Isgec Heavy Engineering
Indian Process equipment industry
Make in India
Import substitution opportunities
Industrial localization
AI and automation in manufacturing
Digital twin technology
Skilled workforce in industry
Supply chain resilience
China plus one strategy
chemical sector
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