Machinery and equipment and Metal products

Machines are built from castings, forgings and fabricated parts, about ₹8 of every ₹100 of machinery output, and the foundries and forge shops that make them in turn buy machine tools; prices of the two move closely over a year.

Machinery and equipment (industry) and Metal products (industry): 4 relationships.

How they are linked

1. Buys from

Physical flow · ₹8.2 per ₹100 · Machinery and equipment buys from Metal products

Pumps, engines, tractors and industrial machines are assembled from castings, forgings, fasteners and fabricated structures bought from metal-product makers.

• ₹8.2 of every ₹100 of Machinery output, all rounds (India 2022)
• ₹6 bought directly
• ₹1.4 of every ₹100 of Metal products output spent on machinery, all rounds

Metal products buy back about ₹1.4 per ₹100 of output from machinery, mainly presses, CNC machines and moulding lines, which are capital goods counted partly outside these flows.

Sources: OECD

2. Price co-movement

Cost and price · Strong · Prices move together, metal products first

Both industries price off steel and other metals, and machinery makers pass part of casting and forging cost changes into their own prices.

• about 0.74 correlation of 12-month price changes, India WPI
• about 0.21 correlation of monthly changes

Metal product prices lead by about a month, consistent with steel cost changes reaching castings first and machinery later. The monthly link is weak because machinery prices are set on orders and contracts, while the yearly link is strong.

Sources: Material Insights (World Bank, FRED, IMF data)

3. Industry input

Physical flow · Criticality 4 of 5 · Metal products to Machinery, and Machinery to Metal products

Six enterprise types in machinery depend on metal products, led by bearing, gear and hydraulic makers that need forged rings and blanks; five in metal products depend on machinery, led by machine-tool, press and welding-equipment makers, with foundries and forge shops close behind.

• ₹14,286 crore Indian machine tool production, 2024-25 estimate (₹6,602 crore in 2020-21, current prices)

A machine maker that qualifies a casting or forging supplier cannot switch quickly, because new tooling and testing take time. Foundries and forge shops in turn need moulding lines, presses and CNC machines, and Indian machine tool output in rupees roughly doubled between 2020-21 and 2024-25.

Enterprise types that depend on it:

• Machine-tool, press and welding-equipment makers: machine-tool sector (criticality 4 of 5)
• Ferrous and non-ferrous foundries: moulding lines and fettling (criticality 3 of 5)
• Forging shops: forging presses and CNC machines (criticality 3 of 5)
• Fastener, spring, wire and precision-machining makers: headers and CNC machines (criticality 3 of 5)
• Structural steel fabricators and tube makers: tube mills and welding robots (criticality 2 of 5)

Sources: Material Insights; Material Insights; Ministry of Heavy Industries

4. Castings and forgings base

Physical flow · Strong · India's foundries and forge shops supply machine makers

India has a large, mostly small-firm foundry and forging base, which gives local machine makers a nearby supply of rough metal parts.

• 15.16 million tonnes castings produced, 2023-24, second in the world
• 2.9 million tonnes forgings produced a year, from 4.8 million tonnes of capacity, 2025

About 5,000 foundries, 90% of them MSMEs, work in clusters such as Rajkot, Kolhapur, Coimbatore and Batala. Automotive takes 32% of castings, with industrial and farm machinery, pumps and compressors together about 20%; about 30% of forgings are exported.

Sources: The Institute of Indian Foundrymen; The Machine Maker

For investors

Key learnings

1. Metal parts are about ₹8 of every ₹100 of machinery output, so steel and casting costs move machinery margins.
2. Yearly price changes in the two industries are closely linked (about 0.74), with metal products leading by a month.
3. India's foundry base is large but made up of about 5,000 mostly small firms in regional clusters, so supplier quality and capacity have to be checked plant by plant.

What to track

• WPI for castings, forgings and machinery: Shows cost pass-through from metal parts to machines (Monthly · Office of the Economic Adviser)
• Steel long and flat product prices: Leading signal for casting and forging prices (Weekly · JPC, SteelMint)
• Capital goods output index: Rising output lifts demand for castings and forgings (Monthly · IIP, MoSPI)

For policymakers

Key learnings

1. Machinery makers rely on thousands of small foundries; support for MSME clusters is support for the capital goods chain.
2. Foundries depend on machine tools and presses, so domestic machine tool capacity supports the parts base.
3. Automotive takes about a third of Indian castings, so machinery makers compete with car makers for foundry capacity when both are growing.

What to track

• Foundry and forging output and exports: Shows the strength of the parts supply base (Annual · IIF, AIFI)
• Machine tool production and imports: Measures dependence of parts makers on foreign tools (Annual · Ministry of Heavy Industries, IMTMA)
• MSME credit to metal products clusters: Signals capacity to invest in new lines (Quarterly · RBI, SIDBI)

India

India is the world's second largest producer of both castings (15.16 Mt in 2023-24) and forgings, with about 5,000 mostly small foundries supplying its machinery makers.

Sources

1. OECD Input-Output Tables 2025 edition, India 2022, OECD
2. Price correlation, Material Insights, Material Insights (World Bank, FRED, IMF data)
3. Industry map: Machinery and equipment, Material Insights (2026)
4. Industry map: Metal products, Material Insights (2026)
5. Profile of the Indian foundry industry, The Institute of Indian Foundrymen (2024)
6. AIFI showcases India's forging excellence at the 24th International Forging Congress, The Machine Maker (2025)
7. Rajya Sabha unstarred question 2318: machine tools production, Ministry of Heavy Industries (2025)