Domestic market more attractive for infra firms

Even though the export of engineering construction services increased 87.26 per cent to $2.52 billion in 2006-07, as against $1.3 billion a year ago, not many Indian construction companies are venturing abroad because of the huge opportunity that exists within the country.

"Most international projects last year were secured by less than ten companies. Indian engineering construction companies are focusing on the domestic sector at the moment," said Chander Verma, chairman, Project Exports Promotion Council.

According to analysts, there are more than 60 engineering construction companies in the country, of which only 20-odd are actively exploring projects abroad. According to data available with the council, around 12 companies successfully bid for international projects.

More than 80 per cent of the international engineering construction projects carried out by Indian companies are in West Asia. "This is because we have a geographical advantage in that area. But Indian companies are not able to fully tap emerging markets like Latin America because of competitiveness issues," said K Bhushan, executive director of the council.

With the domestic demand for infrastructure going strong, Indian companies are focusing on projects within the country. "India will need infrastructure projects worth $500 billion in the next 5-10 years. Even now, infrastructure development is robust. In roads itself, projects worth $40 billion will be needed in the next 5-10 years," said a Delhi-based infrastructure analyst.