Despite India being the fifth largest producer and consumer of electricity in the world, according to the 11th five year plan, the country was only able to achieve 69 per cent of its planned capacity of 78,700 MW. To overcome the demand and supply deficit, the Indian government is gradually increasing the planned capacity addition. Despite this, there has only been a marginal boost to the demand for distribution machinery such as switchgears and control gears. The findings are part of a report titled Switchgear and Control Gear Industry in India, 2013-2017 prepared by ValueNotes. The report provides a comprehensive view on how the switchgear industry is performing, its market size, and drivers & inhibitors contributing to its growth.

The switchgear and control gear industry in India, currently accounting for ~10% of the overall electrical equipment sector, was valued at INR 135 billion in FY2013. ValueNotes estimates that the industry will be worth approximately INR 215 billion by FY 2017, a slower CAGR of approximately 10%, compared to 15% between FY2010 and FY2012. This diminished growth is due to an increase in cheap imports, an uncertainty and delay in the implementation of power reforms, and the lack of adoption of international standards in manufacturing by local players.

"The rise in imports, especially in low voltage switchgears, is the biggest challenge that Indian players are facing, along with the entry of sub-contractors with limited technical know-how," says Tejaswee Shrestha, research analyst at ValueNotes. "The lack of standard specification also has resulted in the overall reduction of exports by ~10% in the past year," she adds.

Low voltage switchgears, which accounts for more than 55% of the total market, has a higher share of unorganised players; and this is expected to increase in the coming years. The forward integration of these unorganised players to medium and high voltage segments can lead to an increase in the unorganised market share in these segments too, which is currently dominated by five or six players such as ABB Ltd, Alstom T&D India, Bharat Heavy Electricals, and Crompton Greaves.

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