Report Overview

A growing focus on addressing the spurring high demand for electricity across the country and for repairing existing grid infrastructure is projected to propel the expansion of the India power and distribution transformer market during the forecast period between 2023 and 2029.

India Power and Distribution Transformer Market - Industry Trends & Forecast Report, 2029

India power and distribution transformer market size was estimated at USD 1.48 billion in 2022. During the forecast period between 2023 and 2029, the size of India power and distribution transformer market is projected to grow at a CAGR of 8.3% reaching a value of USD 2.38 billion by 2029. Major growth drivers for the India power and distribution transformer market include the growing energy demand, government policies and initiatives promoting renewable energy, infrastructure development, and the need for reliable and efficient power transmission and distribution. The government is actively implementing significant measures to enhance the power transmission and distribution infrastructure. Notably, initiatives like UDAY have been launched to facilitate the financial recovery of power distribution firms. Another driving force is the government measures aimed at elevating electrification rates and enhancing the operational efficiency of the country's distribution companies (discoms). India has experienced a notable upswing in power demand, driven by heightened capacity utilization, industrial growth, urbanization, and population increase, currently ranking as the fifth-largest nation globally in terms of installed power capacity. Notably, initiatives such as "Power for All" and ambitious plans to augment capacity by 175 GW by 2022 are expected to significantly elevate the demand for power transmission and distribution equipment. Also, the Indian government has set ambitious goals, envisioning the addition of approximately 1 lakh circuit kilometers of transmission lines and 2.9 lakh MVA of transformation capacity from 2017 to 2022. These efforts aim to fortify the transmission network, consequently driving an increased demand for power transformers.

India Power and Distribution Transformer Market – Overview

India power and distribution transformer market refers to the sector of the Indian electrical industry that deals with the manufacturing, distribution, and utilization of power and distribution transformers. These transformers play a critical role in the transmission and distribution of electrical energy from power generation sources (such as power plants or renewable energy facilities) to end users, including residential, commercial, and industrial consumers. The key components are power transformers and distribution transformers. The India power and distribution transformer market includes various stakeholders, such as manufacturers, suppliers, distributors, utility companies, and end users, who are involved in the design, production, installation, and maintenance of these transformers. Market dynamics may involve factors like demand, supply, regulations, technological advancements, and economic conditions that impact the production and deployment of power and distribution transformers in India. The market may also encompass various types of transformers, such as oil-immersed transformers, dry-type transformers, and special-purpose transformers, which cater to specific industry needs and environmental considerations. This market plays a crucial role in ensuring a stable and efficient electrical supply across India, supporting economic growth and development in the country.

India Power and Distribution Transformer Market

Growth Drivers

Increasing Demand for Repairing Existing Grid Infrastructure

The Government of India is actively enhancing its national electrical grid, focusing on creating a robust and smart infrastructure. In February 2022, it allocated a substantial budget of USD 4.12 billion through the Integrated Power Development Program, primarily directed towards fortifying sub-transmission and distribution networks in urban regions. These efforts are expected to fuel growth in the distribution transformer market. Power transformers primarily rely on materials like steel, aluminum, and copper for their construction. However, the surging prices of these raw materials are likely to constrain the sales of power transformers, particularly in low and middle-income nations. These market dynamics highlight the need for cost-effective solutions and the optimization of existing grid infrastructure to meet increasing energy demands.

Growing Rural Electricity Consumption Fuels Demand for Transformers

The rising electricity consumption in rural areas is driving increased demand for transformers. The Indian power sector is preparing for a substantial infusion of funds, with an estimated INR 1,200–1,300 crore earmarked in the 12th plan. This investment is expected to be evenly split between power generation and transmission & distribution (T&D). The significant allocation to T&D infrastructure is poised to bolster the need for transformers. Government initiatives, such as the Rajiv Gandhi Grameen Vidyutikaran Yojna (RGGVY), are actively improving rural electricity infrastructure and promoting household electrification, which, in turn, is anticipated to stimulate demand for distribution transformers. Also, the heightened focus on Rural Electrification Accelerated Power Development and Reform Programs (APDRP 1-2) seeks to reduce technical and commercial losses at the distribution level while improving the financial health of State Electricity Boards (SEBs). This, alongside industrial expansion and the replacement of aging equipment, is expected to have a significant impact on the transformer market over the next 4 to 5 years.

Restraints

Volatile Raw Material Prices

The transformer industry in India faces substantial obstacles, hindering its growth and performance. These challenges include a dire shortage of high-quality Cold Rolled Grain Oriented (CRGO) steel, with the material predominantly imported, making quality assessment difficult. Additionally, distribution transformers in India exhibit an alarmingly high failure rate of 10–15%, largely due to the entry of unorganized players who prioritize pricing over quality. Financial struggles among State Electricity Boards (SEBs) further compound these issues, limiting private investments in the power transmission and distribution sector and impacting the quality of service. Furthermore, the industry grapples with a dearth of testing facilities with inadequate infrastructure and lengthy overseas testing processes, increasing costs and lead times for manufacturers. These collective challenges present significant impediments to the transformer industry's progress.

Impact of COVID-19 on India Power and Distribution Transformer Market

COVID-19 pandemic adversely affected the Indian power and distribution transformer market, with lockdown measures severely straining the financial health of power distribution companies, hampering their investment in infrastructure. Distribution transformer manufacturers faced operational disruptions due to lockdowns and supply chain issues, resulting in supply-demand imbalances. Additionally, project delays exacerbated by lengthy government procedures slowed the expansion of transmission and distribution networks. Despite these challenges, the market is expected to rebound as India continues to expand its infrastructure and invest in renewable energy. To succeed in this evolving landscape, stakeholders must adapt and streamline processes, ensuring a resilient and dynamic market poised for growth.

India Power and Distribution Transformer Market

Segmental Coverage

India Power and Distribution Transformer Market – By Cooling System

Based on cooling system, the India power and distribution transformer market is bifurcated into Dry Type and Liquid Type segments. The liquid segment holds a higher share in the India power and distribution transformer market by cooling system. They offer efficient heat dissipation, ensuring optimal performance in the country's often challenging and hot climate. Additionally, liquid insulation systems provide better dielectric properties, enhancing reliability and safety. These transformers are well-suited for high-capacity applications, crucial for India's growing power demand. Also, their long service life and robust design make them a preferred choice, aligning with the need for durable and sustainable power infrastructure. As India continues to invest in its power sector, liquid-type transformers remain a reliable and efficient solution.

India Power and Distribution Transformer Market – By Type

Based on type, the India power and distribution transformer market is bifurcated into Power Transformer and Distribution Transformer segments. The distribution transformer segment holds a higher share in the India power and distribution transformer market by type. A distribution transformer, also known as a service transformer, plays a pivotal role within the electric power distribution system by facilitating the final voltage conversion. Its primary purpose is to lower the voltage from distribution lines to a level appropriate for residential, commercial, and industrial users. India, driven by rapid urbanization and industrialization, is enhancing its existing transmission and distribution infrastructure by introducing new transmission lines and establishing additional substations to bridge the energy supply-demand gap in the nation. Notably, in 2021, India's electricity generation reached 1,714.8 Terawatt-Hour (TWh), surpassing the 2020 figure of 1,563.3 TWh. This increase in electricity generation reflects an expansion in power generation capacity, which is expected to necessitate the use of new distribution transformers for the transmission of electricity to end users.

India Power and Distribution Transformer Market – By Rating

Based on rating, the India power and distribution transformer market is divided into 650 kVA, 651–2500 kVA, and Above 2500 kVA segments.

India Power and Distribution Transformer Market – By Application

Based on application, the India power and distribution transformer market is split into Power Utilities and Industrial segments.

India Power and Distribution Transformer Market – By Region

Regionally, the India power and distribution transformer market is divided into North India, South India, East India, and West India. Western India contributed the most substantial share of revenue within the nation. However, it is expected that the primary focus of investment in the transmission sector will shift toward Southern India, with subsequent attention directed towards Northern and Western India. In the distribution sector, the Western region is expected to attract the most significant investment, followed by the Southern and Northern regions.

Competitive Landscape

Major players operating in the India power and distribution transformer market include Toshiba Transmissions & Distribution Systems, Bharat Heavy Electricals Ltd (BHEL), Crompton & Greaves Power, ABB Hitachi India Ltd, General Electric, Schneider Electric, Alstom, Transformers & Rectifiers India Ltd, Bharat Bijlee, and Voltamp Transformers. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In January 2023 - CG Power and Industrial Solutions Limited announced its intention to increase the production capacity of its power and distribution transformer facilities.

• In October 2022 - Hitachi Energy India secured a contract from NTPC Renewable Energy to provide power transformers, crucial components of India's largest solar park, for a 4.75 GW renewable energy park located in Gujarat.

Scope of the Report

By Cooling System

•  Dry Type    

• Liquid Type

By Type

• Power Transformer

• Distribution Transformer

By Rating

• 650 kVA

• 651–2500 kVA

• Above 2500 kVA

By Application

• Power Utilities

• Industrial

By Region

• North India

• South India

• East India

• West India