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Background Paper : Valves Industries

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Valves Sector – Evolution of sector- Indian valves sector is an USD 2 billion industry and exports account for almost 40% of its turnover. It has been growing at a CAGR of approx. 12 % over the last 4 years. India is one of the 7th largest producer of valves Worldwide.
Contribution of Sector to Manufacturing : The Indian valves industry is capable of producing high end engineered products catering to chemicals process and hydrocarbon industries such as Oil and Gas, Petrochemical, Fertilizers, Water & Waste Water, Power Generation in Thermal, Hydro Electric, Nuclear, Metal refining and process sectors.

Advantage India – Potential
- Strong investments in Middle East in Oil & Gas Midstream and Downstream segments
- Investments by Indian oil PSUs in Oil & Gas Upstream, LNG, Pipelines, Refinery & Petrochemical projects
- Growing Indian economy – Investments in Infrastructure

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Background Paper : Valves Industries

  1. 1. Background Paper Focus : Valves Industry
  2. 2. © Confederation of Indian Industry Table of Contents  Background of sector  Existing Enablers  Future Potential  Challenges faced 2
  3. 3. © Confederation of Indian Industry 3 Background - Sector - Evolution of sector- Indian valves sector is an USD 2 billion industry and exports account for almost 40% of its turnover. It has been growing at a CAGR of approx. 12 % over the last 4 years. India is one of the 7th largest producer of valves Worldwide. - Contribution of Sector to Manufacturing : The Indian valves industry is capable of producing high end engineered products catering to chemicals process and hydrocarbon industries such as Oil and Gas, Petrochemical, Fertilizers, Water & Waste Water, Power Generation in Thermal, Hydro Electric, Nuclear, Metal refining and process sectors. - Sector Contribution to GDP: Approx. 0.1% - No. of people employed (directly + indirectly) : Approx. 4 Lakhs - Names of major sub-segments: End User segments: Oil& Gas, Power Generation, Chemical & Petrochemical, Metal & Mining, Water & Wastewater. - Market Overview - Average growth last 5 years :approx. 12 % - Average growth next 5 years : approx. 8 %
  4. 4. © Confederation of Indian Industry 4 Existing Enablers – Strategies adopted – Current Growth Drivers Policy and Eco-system • Focus on Export Promotion • Revision of Indian standards • Indian Valves Quality perception in the International Market • Blanket approval for stocking of fluoropolymer lined valves, covered under SCOMET products”. Export restrictions under Scomet for certain types of valves • Lack of Focus on innovation • Preference in EXIM sponsored overseas projects Industry Evolution and Capabilities Indian valves industry is expected to grow @8% CAGR over the coming year to reach USD 2.8 billion and export is expected to grow @12% to reach USD 1.26 billion by 2020 Market Export Destinations: USA, Middle East and Africa. For oil and gas: Africa, Middle East and Latin America etc. water and wastewater: US, China, and Australia Domestic Market: Namami Ganga Programme, Smart City Development, Irrigation benefit programme (AIBP) & Flood control program, Renewable Energy projects, Refineries, Petroleum Product Distribution
  5. 5. © Confederation of Indian Industry 5 Advantage India – Potential , Opportunities and growth – Future focused Reason 1 - Make in India: Environment for Innovation and Entrepreneurship Reason 2 Improve Infrastructure Planning: Namami Ganga Programme, Smart City Development, Irrigation benefit programme (AIBP) etc. Reason 4 - Increasing Merger & Acquisition Activities Reason 3 - Greater focus on FDI to boost exports and enhance productivity Why Focus on India? Potential - Strong investments in Middle East in Oil & Gas Midstream and Downstream segments - Investments by Indian oil PSUs in Oil & Gas Upstream, LNG, Pipelines, Refinery & Petrochemical projects - Growing Indian economy – Investments in Infrastructure
  6. 6. © Confederation of Indian Industry 6 Challenges faced by sector - Creation of Global Design and Innovation centers - Adoption of latest technologies by valve industry and its supply partners such as Foundries and machine shops need to improve - Valve Industry is capital Intensive industry and high cost of Capital in India would be dampener for Indian manufacturers - Foundries to be incentivized to move towards low volume, high value steels from low value, high volume Grey iron /SG iron supplies. - Limited forging suppliers - Quality perception to be improved by international branding activities - Non alignment of Indian standard with international standards - Labor laws reforms and GST implementation - Blanket approval for stocking of fluoropolymer lined valves covered under SCOMET products ( Special Chemicals, Organisms, Materials, Equipment, & Technologies) - Export restrictions to be removed for Valves covered under SCOMET products

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