By Vijay Karia
The Indian cable industry has had a major change in the past decade, firmly positioning itself as an indispensable component of the nation’s infrastructure and technological development. As a sector which had a boom of opportunities due to the exponentially growing energy needs of our nation, describing its growth as “fast” would be an understatement. This progress is further bolstered by flagship initiatives such as Make in India, increasing urbanization trends, and rising demand from international markets.
The industry is experiencing rapid growth in the past decade and it is expected to grow with a robust CAGR of 14.5% from 2024 to 2032, with its value projected to reach around Rs 3,655.81 billion by 2032, indicating strong demand and expansion potential. This expansion is also driven by India’s renewable energy goal set for 2030 of reaching 500 GW of installed capacity from non-fossil sources, and rapid infrastructure development by several sectors targeting to fulfill them. It is further driven by the government’s emphasis on infrastructure on renewable energy in which we have carved a significant niche.
The growth of the industry is also reflected in the mindset of the population and hence needs to be heavily supported by the infrastructural development by not only the industry players but also the government.
The Indian cable and wire industry experienced robust growth in FY 2023-24, driven by several key factors:
- Government schemes like RDSS, Housing for All and Make in India initiative significantly boosted the demand for cables and wires in various sectors, including telecom, power, and infrastructure. Investments in renewable energy projects further fueled the growth of the cable industry.
- Rapid urbanization and the expansion of smart cities, and buildings infra across India led to increased demand for cables for housing, commercial buildings and infrastructure projects. The growth of data centers and the adoption of 5G technology also contributed to this demand.
- Growing demand for electricity in both urban and rural areas necessitated the expansion of power transmission and distribution networks, leading to increased demand a for power cables.
From Local to Glocal Player
India’s journey from reliance on conventional electrical solutions to embracing renewable energy is remarkable. The country has evolved from limited technological capabilities to becoming a global production powerhouse. Companies that once struggled to gain recognition in international markets are now celebrated for their quality and innovation. Indian manufacturers have made significant strides in exports, particularly in electrical cables, earning accolades for their competitive edge on a global scale. India has propelled from a country facing power shortages to one boasting premium electrical and renewable energy capabilities, positioning it as the third largest producer of electricity in the world.
Cable Industry Challenges
Despite its growth, the cable industry faces several significant challenges that constrain its full potential.
- “The L1 Concept” – In India a trend that has been observed- “L1”- is common not only in the everyday lives of its people but is also seen in the industry and market of the electrical cable sector. Lower cost is prioritized over quality and safety. This increases the risk factor of a high voltage electrical cable which is a highly specialized and engineered equipment with barely any room for cost cutting without risking the safety aspects. Every single piece of material that goes into the construction of these cables is well-purposed and fitted into the tight constraints of the ratio of cost and safety. The extent of damage possible by faulty cables is unimaginable and hence must not be gambled with in the name of the legacy of the infamous “L1” tendencies of the Indian multitude. The government should create a positive opportunity around this concept to help the industry progress without putting the safety of the consumers at risk.
- Fluctuating Raw Material Prices: The prices of raw materials like copper and aluminium, which are essential for cable manufacturing, fluctuated significantly in the past year, impacting the profitability of cable manufacturers and further leading to pricing concerns.
- Counterfeit Products: The issue of counterfeit and substandard cables and wires poses a prevalent threat to the industry’s reputation and consumer safety.
- Capital Investment: Upgrading manufacturing facilities to meet international standards requires substantial capital investment, which many companies struggle to manage.
- Skilled Workforce Shortages: The industry faces a shortage of skilled workforce, which hampers productivity and quality standards.
Despite these challenges, the outlook for the Indian cable and wire industry remains positive. The government’s continued focus on infrastructure development, digitalization and the growing electricity demand is expected to drive further growth in the coming years.
Expectations from the 2025 Budget
The union budget for fiscal 2025-2026 will present an enormous opportunity to tackle some essential issues in India’s cable industry. Initiatives regarding boosting domestic supply chains and building India as a global manufacturing hub are long overdue in this context, taking into consideration international changes and efforts towards disengagement from China-based supply chains. Also, recent changes in the markets due to the Trump government and his commentaries about tariffs especially on BRICS countries have made the market trudge with volatility impacting profitability.
To achieve sustainable growth aligned with “Viksit Bharat,” the government must balance industrial demands and economic priorities. Ambitious infrastructure and renewable energy projects present significant opportunities for the wires and cables sector. However, challenges like fluctuating raw material costs, technological needs, and skilled labor shortages must be addressed. A strategic budget with investments, regulatory support, and innovation incentives can empower the industry to capitalize on these opportunities and position India’s cable sector as a global manufacturing and technology leader.
In conclusion, while the Indian cable industry is on a robust growth trajectory, driven by increasing demand and government initiatives, addressing challenges such as quality control, raw material volatility, and skilled labour shortages, with the right strategic investments, regulatory support, and innovation-driven policies, India is well-positioned to emerge as a global leader in the cable sector, contributing significantly to the nation’s infrastructure development and renewable energy goals.
Vijay Karia is the Chairman and Managing Director at Ravin Group of Companies. Views expressed are personal. Reproducing this content without permission is prohibited.