Infrastructure development in India is booming, with highways, rail projects and alternative energy initiatives—all aimed at modernizing the country’s infrastructure— forging ahead at an impressive rate.

Investment in Infrastructure Projects accounted for US$436 billion in the 11th five-year plan (2007-2012). According to the 12th five-year plan (2012-2017), the Planning Commission has estimated a total investment of over US$1 trillion for infrastructure projects in the country.

The various infrastructure projects undertaken by the government, such as road construction, railway construction, mining, irrigation, urban infrastructure, and real estate have the added benefit of promoting growth in other industries along the way.   

One such industry experiencing growth thanks to the dollars being funneled into infrastructure projects is the LV and MV Switchgear Market in India, which is projecting a CAGR of 12.05 percent from 2013-2018.

Switchgear is a combination of several components such as switches and circuit breakers that are used to control and distribute electric current across end-users. The use of Switchgear enables continuous transfer of electric current and protection against current overload, short circuit, and insulation failure. It provides safe isolation from current-driven parts and modifies a load-carrying system at each level of installation.

Since India is the fifth largest producer of electricity in the world (after China, the US, Russia, and Japan) it’s no mystery why switchgear is in such high demand. Combine this demand with the fact that the Indian government has allowed 100 percent foreign direct investment (FDI) in the electrical equipment industry (bumping the FDI in the industry from US$3.10 billion in 2012 to US$3.30 billion in 2013), and you have a pretty perfect storm for growth in electricity-adjacent industries, like switchgear.

High Initial Investment Stymieing More Aggressive Market Growth

With the number of innovative new infrastructure projects on the go, the Market has witnessed an increase in the need for switchgear with advanced features and functionalities that enables the detection of faults at the earliest stage. The downside is that a large amount of capital is required to develop and install such advanced technology.

The effective installation of switchgear can require alterations to the entire structure and wiring of a building. The cost associated with these installations, along with the cost of switchgear itself, is very high, which acts as a barrier for increased investment in this area.

But despite the challenge that cost presents, the LV and MV Switchgear Market in India has been witnessing an increased replacement of old switchgear with new, easy-to-install and maintain technology across various industries.

Additionally, demand from the commercial sector is providing a serious boost to the market outlook over the next few years. A rise in the construction of hotels, warehouses, storage facilities, retail stores, hospitals, and colleges (all part of the aforementioned infrastructure development) has led to an increased demand for power, and in turn LV switchgear, across the commercial sector.