Gujarat’s Rajkot region is poised to lose the tag of being home to a diesel engine manufacturing cluster. Most of Rajkot’s diesel engine manufacturers are switching to products such as submersible pumps and auto parts.
What used to be a cluster of over 200 manufacturers has been reduced to barely 60 players. Political instability in the Middle East and African countries — major export destinations for Rajkot’s diesel engine manufacturers — in the last two to three years had forced many enterprises from the cluster to move to other businesses, said industry sources.
“Rajkot is the leading source of exports of diesel engines to the Middle East and African countries. But due to the unstable political scenario there, diesel engine exports from Rajkot have fallen by 60 per cent in the past year,” said Atul Patel, partner of Power Engineering Corporation Private Limited.
Besides, diesel engines used for agricultural purposes are witnessing strong competition from submersible pumps. “Farmers now use submersible pumps for water in their farms, as electricity is available in most of the parts of the country. This has reduced demand for diesel engines in farms,” Patel added.
Among Rajkot-based units, Power Engineering has cut production from 3,500 engines to 2,000 engines per month over the past two years.
Similar is the case with Prem Engineering Pvt. Ltd. “Over the last one year our international business is down by 50 per cent and we do not expect any good business from there in the coming days,” said Jaydip Dave, director of Prem Engineering.
“The pump industry is rapidly growing in Rajkot, which has led some of the diesel engine manufacturers to shift to pump manufacturing,” said Bhavesh Patel, president of the Rajkot Engineering Association. The city is also witnessing the growth of the auto parts industry. According to industry sources, 30-50 new players have been entering this business every year.
We have to initiate exports of certain items under ITC HS code 84128030 and, according to fixed Duty Drawback schedule, are entitled to 1.1 per cent. ...