The core story: output scaling fast, concentration falling, growth accelerating
Electrical Equipment is not a sector standing still: factories grew from 7,639 to 8,100 (2014-15 to 2023-24), persons engaged from roughly 5.06 lakh to 8.53 lakh, and Gross Value of Output very nearly tripled, from ₹2.32 lakh crore to ₹6.57 lakh crore, a 182.8% increase, national ASI totals. The firm structure has stayed comfortably inside the Competitive HHI band throughout: the top-3 firms' combined market share moved only modestly, from 18.0% in 2014-15 to 15.7% by 2024-25, and HHI held in a narrow 187.9-224.0 range across the decade, ending at 198.6.
The IIP tells a story of acceleration after a weak middle stretch. The index peaked early, at 128.4 in 2015-16, then fell for three straight years and again through COVID to a trough of 92.3 in 2020-21. Recovery was slow at first, bouncing in the 99-104 range through 2021-23, but then accelerated sharply: the index gained 24 points in 2023-24 alone and reached an all-time high of 141.9 by 2025-26. On the Institute's cross-sector ranking, Electrical Equipment now sits 3rd of 10 sectors on latest-year growth, even though its full-period CAGR (1.77%) ranks only 7th of 10, a reminder that the weak mid-decade years still weigh on the long-run average even as recent momentum has clearly turned.
Trade: a widening deficit on both a growing export and an even faster-growing import base
Electrical Equipment runs a structural trade deficit, not a surplus, of ₹53,183 crore in FY24-25. Exports are growing fast (15.2% YoY, a 15.2% five-year CAGR), but imports have grown from a larger base at a rate close behind (12.1% YoY, 13.5% five-year CAGR), so the absolute gap keeps widening even though export growth technically outpaces import growth on a percentage basis in the latest year. Import dependency stands at 58.4% of consumption. China alone supplies ₹88,282 crore of imports, roughly ten times the next-largest import partner (USA). Lithium-ion batteries are the single largest import line (₹25,459 crore), a distinct driver from the more traditional wires, switchgear and transformer trade that dominates the export side.
Investment: a scaling private pipeline, and a sharp rise in dropped projects
New investment in Electrical Equipment reached ₹24,865 crore in 2024-25, almost entirely private (Indian Private Sector alone accounted for roughly 97% of the total), a more than tenfold increase from ₹2,258 crore in 2019-20. The clearest warning sign in this sector's data is the cost and count of dropped projects, which rose roughly eight-fold in a single year (₹1,178 crore to ₹9,400 crore, 9 to 38 projects, 2022-23 to 2024-25). Set against that, Implementation Stalled has read zero, in both cost and count, every year since 2021-22. The PLI for White Goods (Air Conditioners and Refrigerators) expenditure CMIE records against this sector is small and recent (a Revised Estimate of ₹213.6 crore in 2024-25, first appearing only in 2021-22), and covers only the AC-and-refrigerator slice of the sector rather than Electrical Equipment as a whole, worth keeping in mind before treating it as a sector-wide policy signal.
Geography: a more evenly spread map than most sectors in this series
Maharashtra leads by GVO share (14.9%, ₹98,034 crore in national terms), but not by the wide margin seen in Chemicals (Gujarat) or Transport Equipment (Maharashtra and Tamil Nadu combined). Karnataka (11.2%), Gujarat (11.0%), Tamil Nadu (9.1%) and Uttar Pradesh (7.9%) round out a top-5 that together holds only about 54% of national output, a more distributed geography than most other sectors in this series. Karnataka stands out on wages per worker (₹2,88,133, the highest of the top-5) despite a mid-sized factory count, consistent with a Bengaluru-anchored cluster oriented toward higher-value power electronics rather than high-volume, lower-wage assembly. Haryana (₹51,514 crore GVO nationally) narrowly misses this top-5 list but remains a substantial producer in its own right.
Clusters: five hubs, each around a distinct product line
Five clusters are profiled across four states, none dominant: Coimbatore (Tamil Nadu, motor pumps and wet grinders), Vadodara and Rajkot (Gujarat, transformers and motors), Amritsar (Punjab, electric fans) and Siliguri (West Bengal, lead-acid batteries, anchored by Exide). Coimbatore's proximity to major automotive OEMs, which generate downstream casting demand, is the clearest example of a firm-to-firm linkage among them.
R&D: a laggard, broadly flat rather than rising or falling
R&D spend as a share of sales has held in a narrow 0.20%-0.33% band across the decade, closing at 0.22% in 2024-25, squarely in the "laggard" band (below 1%) with no clear multi-year trend in either direction. This sits below Chemicals' 0.55% but above Textiles' 0.10%, roughly consistent with a sector whose growth to date has come from scaling production and consolidating around a smaller number of larger firms rather than from a step-change in in-house innovation spend.
Explore the sector: interactive mindmap
Electrical Equipment is a sector scaling up quickly on almost every count, output, firm financial health, and now IIP growth momentum, with a firm structure that has stayed comfortably competitive throughout, distinct from Textiles' rising concentration or Electronics' sharp de-concentration (which nonetheless stayed inside the Competitive band throughout). The open questions sit in trade and investment discipline: a deficit that keeps widening even as exports grow, a heavy and rising reliance on imported lithium-ion batteries specifically, and a sharp recent rise in the value of dropped investment projects that sits alongside, not instead of, real growth in new investment. The PLI figure recorded against this sector is small and covers only the air-conditioner and refrigerator segment, so it should not be read as a sector-wide policy signal.
References
Methodological Notes
Institute of Manufacturing and Economy · Sector Snapshots · August 2026 · NIC Division 27 · Primary research: Kahaan Shah · Compiled by: Riddhi Bhargava
Author's Profile
Kahaan Shah is a BTech student in Computer Science and Engineering, Class of 2028. He interns at the Institute of Manufacturing and Economy and conducted the primary research for this sector snapshot.