 "India's construction market to be third largest in the world by 2025")
India’s import of project goods has been adversely affected by the ongoing downturn in global trade and, in turn, may point to a slowdown in the infrastructure sector.
Broadly referring to the input materials required in the construction of civil and private infrastructure projects, the import of project goods may act as a barometer for the pace of infrastructure creation, both public and private, in the country.
India is a net importer of such goods and, historically, has had a higher inflow during periods of growing infrastructure activities.
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A look at India’s imports in the current financial year leading up to December shows that project goods category has been hit especially hard with a fall of more than 24%. This may lead to a systemic lag in the beginning or completion of infrastructure projects for a protracted period to come, which becomes significant at a time when the government is keen to push through with the smart cities project.
For January too, project goods went down by more than 20%.
This will also invariably impact the gamut of domestic industrial output. Although the latest figures suggest the index of industrial production (IIP) grew by 2.9% in January, the cumulative figures for the financial year are much lower as compared to the previous year. While in the April-Jan period of 2015-16, the IIP grew by 2%, the corresponding figures for the previous year suggested a growth of 5.3%.
On the other hand, the export of project goods also went down by more than 41% in the April-December period.
