India’s expanding electricity transmission network, renewable energy integration and growing data centre industry could create significant opportunities for the country’s capital goods manufacturers, according to a report by 360 ONE Capital.
The outlook points to rising demand for specialised electrical equipment and advanced transmission technologies as India invests in infrastructure to support increasing power consumption. High-Voltage Direct Current (HVDC) transmission systems and equipment required by data centres are expected to be important contributors to this potential growth.
However, the extent of the opportunity will depend on project execution, equipment manufacturing capacity and the pace of investment.
HVDC Transmission Projects Could Expand Significantly
HVDC technology is used to transmit large amounts of electricity efficiently over long distances. It can also support the integration of renewable energy into the wider electricity network.
According to the 360 ONE Capital report, India’s HVDC capacity could increase from 34.5 gigawatts in FY2027 to 55 gigawatts by FY2032. The report also points to an additional 78 gigawatts of HVDC projects identified by the Central Electricity Authority for development through FY2036.
If these projects progress as planned, manufacturers could benefit from demand for transformers, transmission equipment, power electronics and related infrastructure.
The opportunity will also depend on the timing of project awards and the ability of suppliers to deliver equipment within scheduled deadlines.
Data Centres Emerge as Another Source of Demand
India’s growing digital economy is creating additional electricity requirements through the expansion of data centres. These facilities support cloud computing, digital services and artificial intelligence workloads, all of which require dependable power infrastructure.
The report estimates that India’s data centre capacity, currently below 2 gigawatts, could reach between 13 and 18 gigawatts by 2030.
This projected expansion could increase demand for transformers, switchgear, power distribution systems and equipment designed to maintain reliable electricity supplies.
For capital goods manufacturers, data centres could therefore provide an additional source of orders alongside conventional transmission and grid-modernisation projects.
Domestic Manufacturing Could Benefit
The expansion of India’s power infrastructure could create opportunities for companies capable of manufacturing specialised high-voltage equipment locally.
Greater domestic production may help improve supply-chain resilience, reduce reliance on imported equipment and allow suppliers to respond more effectively to project requirements.
Manufacturers that can meet technical standards, expand production capacity and deliver projects on schedule may be better positioned to compete for future orders.
Nevertheless, the concentration of suppliers in certain specialised equipment categories could remain a challenge as demand increases.
Key Risks for Capital Goods Companies
Despite the favourable long-term outlook, several factors could affect growth and profitability across the sector.
Project delays: Slower tendering, approvals or execution could postpone order inflows and revenue recognition.
Rising input costs: Higher prices for commodities and industrial materials could put pressure on manufacturing margins.
Limited supplier capacity: A concentrated supplier base may create bottlenecks when several large infrastructure projects require equipment simultaneously.
Uncertain export demand: International orders and investment trends could affect manufacturers seeking growth beyond the domestic market.
Data centre investment risks: Actual capacity additions may differ from projections if financing, power availability or construction timelines change.
These factors make project execution and cost management important considerations when assessing the sector’s long-term prospects.
What the Outlook Means for India’s Capital Goods Industry
India’s planned transmission expansion and rising demand for data centre infrastructure could support a new phase of investment in electrical and industrial equipment.
HVDC projects may create opportunities in high-voltage transmission, while data centre construction could increase requirements for reliable power distribution systems. Domestic manufacturing capabilities will be important in determining how much of this demand Indian suppliers can capture.
For businesses operating in this sector, financial planning, cost monitoring and strong internal controls can support operational decision-making. Companies seeking to strengthen financial oversight can explore auditing services in India.
Ultimately, the sector’s growth will depend on whether infrastructure plans translate into actual orders, timely project completion and sustained investment in electricity and digital infrastructure.