18 billion USD domestic foundry sector eyes revival in 2018

Currently, the annual revenue of the Indian foundry stands at 18 billion USD of which 2.7 billion USD is through exports. A steady growth has enabled it to become the third largest caster in the world. It employs two million people directly and indirectly. 

Approximately 25 to 30 percent of foundries are in the Southern region and their contribution is significant to the overall growth of the industry. While the Indian foundry sector has growing at 10 – 15 percent upto 2008, the growth rate subsequently, has come down to 3 -5 per cent mainly due to decline in demand. There have been some signs of demand growth of late in areas such as auto, earth-moving and tractors. 

Defence, aerospace, railways and capital goods will create substantial demand for foundries. The foundries will also need to gear up to meet the stringent requirements of these niche sectors. With close to 35 pc of castings being supplied to the automotive sector, with passenger cars registering 6 pc to 7 pc growth in the last six months, the demand has looked up for foundries. 

There is buoyancy in the general engineering industry. Yet, steel foundries operate at 50 pc capacity as oil and gas sector has not revived. Core agriculture equipment sector might catch up. This, with automotive and construction machinery, will drive business this year. The industry expects opportunities from the railways. 

TN has the highest share of foundry production in India (12 pc). “Industrialists also expressed concern over the rates on foundry products proposed in the GST. At present, foundry products have been placed under the 14.5 pc to 17.5 pc bracket. 

However, the tax will vary according to the end user. The IIF plans to set up a Centre of Excellence for casting technology and a Skill Development Centre in Coimbatore with the support of the Union Ministry of MSMEs. 

This proposal, which awaits the Centre’s approval, is in the interest of Small and Medium Foundries located here. The project will be a boon as it will help tide over issues confronted by the small units on the technological and labour fronts. A model foundry will be set up to give the workers hands-on training. The total cost of this project has been estimated at Rs 40 cr.