Making Capital Goods
Index : 1,335 | 1Yr : +4.8% | 1Mo : +7.58%
Category : Sectoral Trackers
Min Investment : 15,143
In simple terms, capital goods are assets which are required by companies to produce goods and services. These assets are treated as capital expenditures as the utility of these assets / infrastructure lasts for a long period of time. There are various types of capital goods ranging from different kinds of machinery, manufacturing equipment, industrial electronics and a variety of other large-scale industrial equipments which help in enabling goods and services. Companies comprising of these activities are collectively known as the capital goods sector.
In 2016, The National Capital Goods Policy has been drafted by a joint task force from Confederation of Indian Industries (CII) and the Department of Heavy Industries. The aim is to triple the sector in the span of 10 years.
The sector is very sensitive to business cycles and thus flourishes when industrial production is in a booming phase. The Index of Industrial Production (IIP) and GDP are indicators of the potential scope and potential of the capital goods industry. Indian companies which have diversified and bagged international tenders will be able to cope better with the fluctuating business cycles.