This document outlines India's National Capital Goods Policy. It aims to increase the share of capital goods in manufacturing from 12% to 20% by 2025. Capital goods include machinery and equipment used for production. The policy was created because capital goods are a strategic sector for strengthening India's long-term manufacturing capabilities. It also aims to address issues affecting domestic demand, exports, technology, costs, and small businesses in the capital goods sector.

2. Capital goods consist of plant machinery,
equipment and accessories required, either
directly or indirectly, for manufacture or
production of goods or for rendering services,
including those required for replacement,
modernization, technological up gradation and
expansion of manufacturing fa.cilities

3.  Strong manufacturing sector is critical to sustained
growth of the economy; Recognizing this, National
Manufacturing Policy was announced in 2011
 The Prime Minister’s Group constituted under
Chairman of the National Manufacturing
Competitiveness Council (NMCC) identified
Capital Goods as one of the strategic sectors for
strengthening national capabilities in the long-
term; hence National Capital Goods Policy is
announced.
 The National Capital Goods Policy is formulated
with the vision to increase the share of capital
goods contribution from present 12% to20% of
total manufacturing activity by 2025.

4.  Manufacturing Sector contribute only 17% of
India’s Gross Value Added1 as per World Bank
data, 2014.
 India’s global share of manufacturing value added
is only 2%.
 Capital goods sector contributes 12% to
manufacturing which translates to 2% of GDP.
 Planning commission targeted a growth rate of
16.8% p.a. for production of capital goods during
the 12th Five Year Plan period, but the actual
growth rate in the sector over the last 3 years is
only0.3%.

5.  To increase total production
 To increase employment
 To increase domestic market share
 To increase exports
 To improve skill availability
 To improve technology depth
 To promote standards
 To promote SMEs

6.  Issues affecting domestic demand creation and
expansion
 Issues affecting exports
 Issues affecting technology depth
 Issues affecting cost competitiveness
 Issues related to sub scale units

7.  To devise a long term, stable and rationalized tax and
duty structure.
 To draft comprehensive public procurement policy
 To simplify terms of General/Special conditions of
contract
 To formulate comprehensive export policy
 To set up sub sector specific Skill council for Human
Resource development.
 To organize industrial investments through National
Project Model for specified high technology.
 To evolve a standard policy to achieve global
benchmark
 To set up Advisory Group for Ministry of MSMEs.

8.  It will help the manufacturing sector in
achieving its 25% share of Gross Value Added
as envisaged in ”Make In India” scheme.
 It will provide sustainability to the Indian
economy.
 It will generate employments.
 It will improve India’s trade balance