Pumps are essential equipment in nearly every sector of the economy, including infrastructure and agriculture. The Indian pump industry is a vital contributor to the country’s growth. Industrial use and agricultural use are the two main end uses of pumps. The majority of industrial pumps are used in the oil and gas, electricity production, metals and mining, water and wastewater treatment, and chemicals industries. Based on the kind of operating principle, pumps are divided into categories like dynamic pumps and positive displacement pumps.
The Indian pump market structure is very fragmented. It is characterised by the presence of a sizeable number of small- and mid-sized players. The market is highly competitive. The large Indian vendors compete directly with global players, and since they have a wide distribution channel, global players find it difficult to penetrate the market. Due to their relatively cheaper prices, small regional players represent a danger to both big local and international players when it comes to product pricing. Only some of the larger players have the capability of serving the industrial sector. Unorganised small players account for nearly half the supply to the price-sensitive agricultural and domestic segments. The main pump manufacturing clusters in India are located around Coimbatore, Ahmedabad and Rajkot.
Market size
Growing urbanisation, declining groundwater levels and various measures aimed at enhancing infrastructure have all contributed to the Indian pump sector’s expansion over the past few years. The market has evolved greatly. This expansion in domestic infrastructure construction and other water-intensive businesses is responsible for this trend. However, due to the increasing prices of products and the pandemic-like situations, the market has seen a de-growth in the past year. According to the Southern India Engineering Manufacturers’ Association, the pump industry saw a de-growth of around 20 per cent in terms of volume in 2021-22. This was largely due to the increased manufacturing cost of around 45 per cent. The profits of all the companies were hit since the manufacturers were only able to increase the prices of the end products by 25 per cent.
Segmentation
About 95 per cent of pumps sold worldwide are dynamic pumps, also known as centrifugal pumps. The remaining 5 per cent of the market share is with the positive displacement pumps. Single-stage radial flow pumps and submersible pumps make up roughly 70 per cent of all centrifugal pumps. Rotary positive displacement pumps make up the majority of positive displacement pumps. With 46 per cent of the market (in terms of value) accounted for by agriculture and building services, the infrastructure sector as a whole accounts for the remaining 54 per cent of demand.
Small and medium enterprises (SMEs) find it challenging to compete in the technologically advanced industrial section of the pump industry. Domestic pump producers fill around 90 per cent of the market’s demand, and imports account for about 10 per cent of the total. To satisfy the local demand, both Indian and foreign players are involved.
Emphasis on energy efficiency
Energy efficiency has recently attracted interest from a wide range of sources including pump manufacturers. This has inspired them to improve their goods using environmentally friendly design elements. Pump producers in the country are working to continuously improve output, quality and service despite several obstacles.
Current statistics show that star-rated energy efficient pump sets have an average efficiency of 40-45 per cent while inefficient, non-star-rated pump sets have an average efficiency of 25-30 per cent. However, there is huge scope for improvement. The Indian Pump Manufacturers’ Association estimates that simply replacing underperforming pumps with ones that have higher star ratings could result in savings of 20 per cent.
Increased use of technology
With the continued efforts of the central and state governments, the use of solar pumps in the country has increased. According to the Ministry of New and Renewable Energy, as of December 2022, a total solar capacity of 816 MW has been added through the installation of standalone solar pumps under Component B and solarisation of existing grid-connected agricultural pumps under Component C of the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) scheme.
With the installation of about 0.47 million standalone solar pumps in the country, as of December 31, 2022, a reduction of 325 million litres per annum has been achieved in diesel consumption. It has been estimated that there is a reduction of around 0.53 million tonnes per annum in carbon dioxide emissions on account of the total solar capacity installed under the PM-KUSUM scheme.
Key players
Globally, the pump sector is undergoing change and consolidation. Major foreign players are therefore looking to expand their presence in India since they perceive development opportunities in India. Significant foreign businesses are joining the Indian market and attempting to expand their influence. Leading international manufacturers of industrial pumping systems, including KSB Pumps, Grundfos Pumps, Wilo AG and Flowserve Corporation, are already present in India.
In the pump market, several major Indian players, including Kirloskar, CRI Pumps, Texmo Industries, Jyoti Pumps, WPIL Limited and Flowmore, have a sizeable presence and provide tailored solutions to various market segments. Several middle-sized competitors, including Shakti Pumps, Falcon Pumps, Roto Pumps, Kishor Pumps, Sharp Pumps, Suguna Pumps and Aqua SubPumps, hold a sizeable portion of the market.
Challenges
A small number of major manufacturers have controlled the entire industry. Small- and medium-sized manufacturers have a relatively low level of penetration. That said, the large number of SMEs in the market that provide affordable pumping solutions have put tremendous pressure on the market share of the bigger firms in the household and agricultural sectors. Further, providing farmers with cheap electricity poses a barrier to the adoption of energy efficient technologies. The rise in input prices, which has caused expenses to grow and margins to decline, is another issue that players have been dealing with. The SMEs have been adversely hurt by this. In the past year, the manufacturing cost of products in the pump sector has also increased.
The way forward
Given the government’s increased emphasis on water management and India’s minuscule share of 3-5 per cent of the
global pump market, the opportunity to grow is huge. To this end, several Indian pump makers have started to enter the international market. However, realigning distribution networks to optimise costs, better understand customer wants and improve services, is urgently required. Moving forward, focus should be placed on creative marketing approaches and energy efficient technologies. The industry is looking forward to better demand this year as raw material prices have stabilised and demand is picking up pace. There is a need for the industry to explore high-value pumps.
The main end-users in India are water and wastewater, chemicals, pharmaceuticals, construction, food and beverage, and mining. Industrial pumps are expected to increase in popularity in India due to factors such as increased focus on energy efficient products in the water and wastewater industry, development of generic pharmaceutical production, rapid urbanisation, rise in large-scale housing projects, and expansion of infrastructure projects.