The majority of foundries are expected to utilise only 50 percent of the installed capacity due to the movement of migrant workers or may also face the permanent shutdown on massive fall in demand from the automotive industry in the upcoming months and will have huge repercussions on the business, according to the Association of Indian Forging Industry (AIFI).
If the industry is able to capitalize on that and if the scrapping policy is announced then the forging Industry production can cross 30 lakhs metric ton by 2021-22S Muralishankar, President, AIFIIn the long run however, the forging industry eyes optimism as Japanese and South Korean companies are planning to shift their businesses out of China. This could also be imitated by their European and North American counterparts and companies. Along with the opportunities coming from the defense sector and the metro sector, there could be some upswing, says S Muralishankar, President AIFI.
“If the industry is able to capitalize on that and if the scrapping policy is announced then the forging Industry production can cross 30 lakhs metric ton by 2021-22” he added.
But to reap these benefits, the industry needs to survive the current disruption in production hit coming from the COVID-19 situation.
Currently, the Indian forging industry generates Rs 34,000 crore revenue from 378 foundries across the country.
| Year |
Installed Capacity |
Total Production (in lakh MT) |
Total Production (in Crore) |
| FY 2014-15 | 37.6 | 22.5 | 27,835 |
| FY 2015-16 | 38.1 | 22.8 | 28,289 |
| FY 2016-17 | 38.5 | 23.9 | 31,189 |
| FY 2017-18 | 42 | 26.0 | 34,000 |
| FY 2018-19 | 45.0 | 30.0 | 45,000 |
| FY 2019-20 | 47.0 | 23.50 | 34,000 |
Source: AIFI
In order to survive, the industry which currently employs 3-lakh people, from the current pandemic, AIFI has made several recommendations to the government to save the jobs of over 1,00,000 employees.
In a letter to the finance minister, AIFI said that liquidity infusion is prime. Companies will continue to incur fixed costs with little or no business in the months to come, as economic activity starts from a grinding halt of around two months. Supporting companies in the short term in meeting fixed costs, and providing liquidity is essential to avoid further economic stress.
It is imperative that the government support manufacturers to survive, overcome the current situation, put the economy back on rails and thereby improve the business sentiment. Short term support for a year or so is very much crucial for economic recovery.
This will result in saving jobs and in the long run provide substantial revenue to the exchequer.
AIFI also demanded waivier on the working captal interest for at least a year. In view of the current situation as payments are delayed from our overseas and domestic customers while the assurance and continuity of business in the next few months globally is also low.
Apart from this, the forging industry is also looking for priority to be given for the movement of export goods and passage of commercial vehicles to be opened to ensure free movement of goods.
