National Capital Goods Policy 2016
A boost to manufacturing sector is envisaged through this National Capital
Goods Policy by providing for an enabling ecosystem for capital goods growth
and ensuring sustained incentive for domestic manufacturers to service
domestic as well as export market demand. The policy envisages increasing
production of capital goods from Rs. 230,000 Cr in 2014-15 to Rs. 750,000 Cr in
2025 and raising direct and indirect employment from the current 8.4 million
to 30 million. It envisages increasing exports from the current 27% to 40% of
production while increasing share of domestic production in India’s demand
from 60% to 80%, thus making India a net exporter of capital goods. The policy
also aims to facilitate improvement in
technology depth across sub-sectors,
increase skill availability, ensure
mandatory standards and promote growth and capacity building of MSMEs.
The policy proposes a comprehensive policy agenda to achieve these goals:
● Make in India initiative
● To create an enabling scheme as a pilot for ‘Heavy Industry Export &
Market Development Assistance scheme HIEMDA).
● Strengthen existing capital goods scheme
● Increasing scope of ‘Scheme on Enhancement of Competitiveness of
● To launch a Technology Development Fund
● To create a ‘Start-up Centre for Capital Goods Sector’
● Mandatory Standardization
● To upgrade development, testing and certification infrastructure
● Skill development
● Cluster approach
● To modernize the existing CG manufacturing units, especially SMEs
● Support services
The National Capital Goods Policy is formulated with the vision to increase the
share of capital 24goods contribution from present 12% to 20% of total
manufacturing activity by 2025.
The policy is envisaged to achieve the following missions
● To become one of the top capital goods producing nations of the world
by raising the total production to over twice the current level.
● To raise exports to a significant level of at least 40% of total production
and become a net exporter of capital goods.
● To improve technology depth in Indian capital goods from the current
basic and intermediate levels to advanced levels.
● To build local champions or large scale Indian corporations.
The objectives of the National Capital Goods Policy are to
● Increase total production
● Increase employment
● Increase exports
● Improve skill availability
● Increase domestic market share
● Improve technology depth
● Promote standards
● Promote SMEs
Scope of national capital goods policy
include 10 sub sector
● Machine Tools
● Textile machinery
● Earthmoving and mining machinery
● Heavy electrical equipment
● Plastics processing machinery
● Process plant equipment
● Dies, moulds and press tools
● Printing machinery
● Metallurgical machinery
● Food processing machinery
● The Capital Goods sector is a very large and important sector and a key
contributor to manufacturing activity in India. The growth of the sector
has been lagging in recent years and the sector is facing a variety of
issues and challenges. The National Capital Goods Policy is envisaged to
immediately address the needs of the sector and proactively facilitate
growth and development of the sector. The policy has laid out a vision
and mission for the sector for the coming decade and proposed a
comprehensive set of policy actions which would enable the
achievement of the objectives for the sector.
● The existing scheme and institutional frameworks serving the capital
goods have been studied and mechanisms to leverage and further
strengthen them have been proposed. A set of new initiatives and policy
actions common to all sub-sectors as well as sub-sector specific policy
actions have also been proposed.
● The smooth implementation and effectiveness of the policy will require
alignment and joint action of several ministries and departments and
have implications on multiple stakeholders and user industries. To this
end, a governance mechanism has been proposed in the form of
interministerial and inter-departmental committees at the highest level
to ensure due consideration of the interests of all stakeholders. The
committees will be tasked with driving coordinated action and
monitoring the progress and effectiveness of policy on an annual basis.
● The capital goods sector operates in a dynamic local and global
environment and it is imperative for the policy to undergo a periodic
review and revision to maintain its relevance. The National Capital
Goods Policy will be reviewed every five years and revised appropriately
to take account of progress in implementation and emerging trends in
the national and international environment.
● The National Capital Goods Policy is a major step to unleash the
potential of this promising sector and is envisaged to contribute
significantly to achieving the overall vision for manufacturing and “Make
in India” as laid out by the Government of India.