market trends 21

Gaining insight into Indian automation sector

National Manufacturing Policy will lead to creation of national investment and
manufacturing zones along with increasing manufacturing activity in the automation
sector that will boost the demand for automation products
Competitiveness of India’s
manufacturing sector is critical
for sustaining the growth of the Download the
PDF file from
www.AandD24.in

Indian economy. Thus, to develop

the manufacturing sector further,
the Government has announced
the National Manufacturing Policy,
which aims at increasing the share
of manufacturing in GDP to 25
per cent by 2022, from the current
level of 15 per cent.

E Contribution from major end-user Perspective of the complex

conomic reforms and various
policy initiatives have made
India one of the fastest-growing
economies in the world today. The
manufacturing sector has played a significant
role in the growth of the Indian economy,
contributing nearly 15 per cent to the
country’s GDP over the last few years. The
National Manufacturing Policy announced
targets at raising the manufacturing share
in GDP to 25 per cent by 2022, from the
current level of 15 per cent. The heightened
industrial investment has contributed to
the growth of the automation market. This
includes programmable logic controllers-
human machine interface (PLC-HMI),
supervisory control and data acquisition
(SCADA), distributed control system
(DCS), and electrical drives (AC, DC and
servo drives) among others.
industries
■ PLC and related HMI: Auto, auto
ancillary, food and beverage constitute
more than 30 per cent of the PLC and
related opportunity
■ Plant SCADA: Oil and gas, and
water and waste water are the top
two sectors for plant SCADA market
with a cumulative share of more than
20 per cent
■ DCS: Power generation, and oil and gas
(upstream and downstream) are the top
two sectors with a market share of more
than 50 per cent
■ Electrical drives: Rotating equipment
is the single largest end-user sector for
electrical drives with a market share in
excess of 30 per cent
business universe
■ Technology impact: The opportunities
include: Re-structured Accelerated
Power Development and Reform
Program (R-APDRP) initiatives by
the Government of India to facilitate
greater usage of automation and data
acquisition systems, contributing to
significant reduction in transmission
and distribution losses. The ultra mega
power projects (involving supercritical
generation technology) will increase
the scale of automation. There would
be preference for touchscreen HMI
over panel-based ones, replacement of
DC drives by AC drives and expanding
DCS functionalities resulting in reduced
PLC usage. >

Dec/Jan 2011/12 | A&D India

 market trends
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22 market trends
One of the challenges would include budget constraints coupled
with higher cost of automation products, which would deter
technology adoption.
■India
Global opportunities
is emerging as a preferred sourcing destination for automation
products (such as electrical drives). It has an increased presence
of IT and software vendors in the global SCADA market. There
have been rising exports to APAC and Middle Eastern countries.
Challenges in this regard would include: acceptance of domestic
(assembled) automation products; lack of relevant semi-conductor/
electronic infrastructure setup; adherence to global regulations;
uncertainty in the global economy.
■ End-user perspective: Opportunities here would comprise strict
regulatory framework that facilitates greater usage of automation
systems and ultra mega power plants (UMPP) that will increase
the opportunities for automation systems. Challenges would be:
budgetary constraints; regulatory framework (US and Europe
FDA regulations; pharmaceutical sector); limited awareness
(SMEs in particular) about the cost-benefit equation.
■ Industry convergence: Various leading software companies
in India are partnering with automation solution providers to
implement/support level 2 and 3 automation products such as
HMI, SCADA, and MES among others. Level four automation
companies such as SAP and Oracle are moving to level three to
provide automation products such as manufacturing execution
system (MES). One of the glitches faced here would include
domain expertise.
Strategic outlook for 2020
(mega trends)
Automation trends and opportunities have been mapped across five
core sectors:
Power
■ Large-size power projects coerce greater opportunities
■ Integrating process and business to achieve higher process
optimisation, monitoring real-time performance, and improving
profitability
■ Power trading and R-APDRP initiatives to facilitate greater
adoption of data acquisition and monitoring solutions
■ Growing participation of Chinese and Korean contractors in
India facilitate increased penetration of automation vendors
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Oil and gas
■
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Network safety in the face of increasing concerns over security
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of oil and gas infrastructure
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■ New LNG terminals and expansion of existing terminals
UÊ
̅iÀ˜iÌÊ£äÉ£ää >Ãi‡/ÊEÊ,-ÓÎÓÊ«œÀÌà ■ City gas distribution projects
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Cement
UÊ i>ÃÕÀiÃʍÕÃÌʙ°™ÊÝʣ䰙ÊÝÊΰÎÊV“ ■ Integrating laboratory automation and quality management
system with the plant control
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■ Increased usage of medium voltage electrical drives
■ Energy-intensive nature of the industry leading to widespread
adoption of energy management solutions such as energy
dashboards, report generation
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 23 23

■ globalisation
Consolidation in the Indian cement industry and increased

■  Infrastructure
■ demand
Greater emphasis on railway scheduling and safety will drive the
for railway management and monitoring system

Metro rail projects

Construction of new ports/airports and modernisation of the
existing ones
Metals and mining
■ Perform Achieve Trade (PAT) scheme will facilitate adoption of
energy management solutions
■ Widespread implementation of MES to manage production
scheduling (manufacturing operations) PRICE MEETS PERFORMANCE
■ Consolidation in the global mining industry necessitates usage
GALIL’S LOWEST PRICED MOTION CONTROLLERS
of asset management software among others
■ Entry of several global steel manufacturers (such as POSCO,
JUST GOT SMARTER
Arcelor Mittal) and global acquisitions (such as Tata Steel’s
acquisition of Corus and Hindalco’s acquisition of Novelis) will
translate to adoption of global best practices The DMC-41x3 Motion Controller uses a powerful RISC processor
India and Japan have entered into a CEPA, which will boost
and offers sampling times twice as fast with double the memory of
bilateral trade between the two countries to US $25 billion (over 10
years) from the current US $10.3 billion. Under CEPA, import duty prior Econo controllers. All without an increase in price. The DMC-
on completely built drives originating from Japan will be zero per 41x3 is the perfect choice for OEMs that demand cost-effective,
cent. Thus, Indian market will witness entry of many Japanese drive
high-performance motion control.
vendors and thus an intensified price war.

Expected announcements
Goods and Services Tax (GST): GST will replace the indirect tax
regime in India. The dual GST will have Central and State GST
levied concurrently by the Center and States. GST will impact all
aspects of businesses; pricing of products and services and supply
DMC-41x3 Econo
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Overall strategic conclusion or card.

The increasing population coupled with rising disposable incomes

has resulted in tremendous rise in domestic demand. The core
sectors of power, oil and gas, cement, infrastructure, and metals,
among others continue to scale up to meet the burgeoning domestic
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`ÀˆÛiÃ°Ê iÜÊÃiÀۜÊ`ÀˆÛiÃÊ«ÀœÛˆ`iÊ
demand. While the looming economic recession has introduced UÊÊÊÊ
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uncertainty in the investment climate, the Government of India is n‡Ê>݈Ãʓœ`iÃ
UÊÊÊÊ£ää >Ãi‡/Ê Ì…iÀ˜iÌÊ
expected to go ahead with its investment plans in the core sectors UÊÊÊÊœ`iÃʜvʓœÌˆœ˜Êˆ˜VÕ`iÊ Ê>˜`Ê1- Ê«œÀÌÃ
to ensure balanced supply-demand. While free trade agreements ˆ˜i>ÀÊ>˜`ÊVˆÀVՏ>Àʈ˜ÌiÀ«œ>̈œ˜]Ê
«œÃˆÌˆœ˜ÊÌÀ>VŽˆ˜}]Ê*6/Ê>˜`ʓœÀi UÊÊÊÊ
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and economic partnerships will intensify competition, the overall
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manufacturing climate and relevant Government/private initiatives UÊÊÊÊՏ̈Ì>Έ˜}ÊvœÀÊÀ՘˜ˆ˜}Êiˆ}…ÌÊ x‡nÊ>݈Ãʓœ`i\ÊÊә°ÓÊÝÊ£n°ÎÊÝÊΰnÊV“
are expected to augur well for the automation industry in the next «Àœ}À>“ÃÊȓՏÌ>˜iœÕÏÞ
few years. ■ UÊÊÊ*i˜ÌÞʜvʜ«ÌˆV>Þʈ܏>Ìi`ÊÉ"
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Courtesy: Industrial Automation & Process Control Practice, Frost & Sullivan, Ã>ÛiÊVœÃÌ]Êë>ViÊ>˜`Ê܈Àˆ˜}ʜÀ]ÊVœ˜˜iVÌÊ L>VŽi`ÊLÞÊ>ˆ½ÃÊ`i`ˆV>Ìi`Ê
South Asia & Middle East ̜ÊiÝÌiÀ˜>Ê`ÀˆÛiÃʜvÊ>˜ÞÊ«œÜiÀ°Ê ÃÕ««œÀÌÊÌi>“
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