India Power & Distribution Transformer Market Research Report: Forecast (2024-2030)

Market Definition

Equipment used for controlling, i.e., either the step-up or step-down of power voltage at a power generation facility or power transmission facility, is known as a power transformer. Due to their capability of handling heavy loads, they are perfectly suited for generating and utility sites. Whereas, a distribution transformer is more suited at the final location of electricity during the power distribution phase to end users and used for lowering the power voltage.

Market Insights & Analysis: India Power & Distribution Transformer Market (2024-30):

The India Power & Distribution Transformer Market size was valued at around USD 3.97 billion in 2023 and is projected to reach around USD 8.41 billion by 2030. Along with this, the market is estimated to grow at a CAGR of around 10.84% during the forecast period, i.e., 2024-30. The market growth is attributed to the soaring development in the nation’s installed power capacity, which has been in line with the burgeoning urbanization, and the government’s initiative to achieve 100% access to electricity across the country. Moreover, India is a rapidly growing economy in the world that is witnessing consistent foreign investments, public & private infrastructure development, etc. This in turn has fueled the construction of electricity generation, transmission, and distribution infrastructure. Thus the need for power & distribution transformers in the country has surged in the past few years.

As per the Central Electricity Authority (CEA) of India, the country has been witnessing a continuous increment in the total generation capacity of electricity (in terms of billion units) throughout the historical period, except 2020 due to the COVID-19 pandemic. The year-on-year growth has been about 0.95% in 2019, nearly -0.52% in 2020, around 7.96% in 2021, and more than 8.87% in 2022. The key reason behind the capacity increase has been the soaring development of the renewable power sector in the nation. As a result, there has been a surging demand for power & distribution transformers in India in the past few years, hence supporting market growth.

Furthermore, the commercial sector of the nation has undergone notable advancements. New & foreign businesses set up in the fields of IT & services, retail, and others have been seen in India in the past few years. This is in line with the flexible FDI regulations introduced by the government of India, which allow almost 100% FDI through automatic & government routes in the majority of the sectors except for defense, broadcasting, and a few others. In 2024, the government of India reported 100% FDI for the space sector. Such initiatives have lured global organizations to set up and expand their bases in India, which has further propelled the demand for office spaces and other commercial facilities. The construction of these buildings also demands transformers for the smooth flow of electricity from the main grid to individual commercial units, thus propelling market growth. For instance:

• In 2023, Google LLC announced that it would construct its biggest office campus outside its home country, the United States, in Hyderabad, India. It is stated to be around 3 million square feet of space.

India Power & Distribution Transformer Market Driver: 

Government Subsidies for the Installation of Residential & Commercial Rooftop Solar Power Plants – The government of India, to reduce its carbon emissions primarily from the energy sector, has pushed the adoption of green energy sources amongst producers and consumers. Since the development and switch of large traditional power plants to green power plants is time- and cost-consuming, the construction of small-scale renewable energy power plants sufficient enough to cater to individual spaces is observed as a feasible option to drastically reduce CO2 emissions from electricity consumption.

Moreover, to fuel the integration of these power plants, the central and state governments of India have announced financial benefits in terms of subsidies on electricity bills, tax rebates on the purchase of solar power equipment, and others. The Ministry of New and Renewable Energy, under its Rooftop Solar Programme Phase 2, offers subsidies of about USD 225 per KW for up to 3KW systems, around USD 112.5 per KW for systems ranging from 3 to 10KW, and a fixed amount of nearly USD 1462.5 for any system above 10KW. Via this program, the government aims to reduce and ease the upfront fixed cost of the solar plant establishment for residential consumers and increase the uptake of residential rooftop solar power plants. Hence, with the increasing construction of rooftop solar power plants, the demand for distribution transformers has been significantly increasing throughout the historical period.

India Power & Distribution Transformer Market Opportunity:

Establishment of New Power Generation Plants via Green Hydrogen (GH2) – The Indian government has been actively pursuing the development of green hydrogen in the nation. The government aims to integrate green hydrogen as a major source of energy into its total energy mix in the upcoming years. For this, the government has launched the National Green Hydrogen Mission under the Ministry of New and Renewable Energy. An investment of approximately USD 2.4 billion has been announced under the mission, which would support the establishment of a complete process cycle from scratch to end, including R&D, electrolyzer and other component manufacturing incentives, the construction of pilot projects, the distribution network, etc.

The mission aims to produce about 5 million tons of green hydrogen through around 125 GW of new renewable power capacity by 2030. Green hydrogen production in India is primarily reported to be with the help of electricity generated from captive solar power plants being established. These massive GH2 manufacturing units and their captive power plants would further necessitate the demand for power transformers for load balancing during routine operations, creating lucrative growth opportunities for the India Power & Distribution Transformer Market in the forthcoming years.

India Power & Distribution Transformer Market Challenge:

The Presence of Obsolete Power Infrastructure Hampering the Efficiency of the Transformers – The presence of obsolete infrastructure has been a grave concern in the Indian Power Industry for decades. Although the power infrastructure in the past period has improved significantly, nonetheless, there is a notable share of old, and inefficient infrastructure still prevailing in the rural parts of the country. The integration of outdated network systems leads to severe transmission and distribution (T&D) losses. These losses further adversely impact the operations of the transformers, as to compensate for the power loss during transmission and distribution, they have to operate beyond their capacities.

Such instances, when they occur frequently, result in more fuel consumption, faster depreciation of the equipment due to load fluctuations and balancing, grid instability, etc. The hampered operations put pressure on every point of the electricity supply chain, thus restraining the optimum function of the overall Indian Power Industry and its revenues. Additionally, T&D losses, being a critical component of aggregate technical and commercial losses, when estimated by the CEA, require an investment of almost USD 53.5 billion to upgrade the distribution infrastructure during 2022-2027. Such large investments directly implicate the backwardness of the T&D infrastructure in the country, which hinders the efficiency of critical equipment and components too.

India Power & Distribution Transformer Market (2024-30): Segmentation Analysis

The India Power & Distribution Transformer Market study of MarkNtel Advisors evaluates & highlights the major trends and influencing factors in each segment. It includes predictions for the period 2024–2030 at the national level. Based on analysis, the market has been further classified as:

Based on Category:

• Power Transformers
• Distribution Transformers

Among them, Distribution Transformers have gained a larger market share in the past few years. Rapid soaring urbanization along with rural area development in the country have supported the larger market share of distribution transformers in the past few years. The increasing youth migration to urban cities in search of jobs has consistently increased the expansion plans of the Tier 1 cities of India. These cities are corporate as well as industrial hubs of the nation and their respective regions; hence, the job opportunities in them are the highest, attracting the Indian youth. The government authorities of cities such as Bengaluru, Delhi NCR, Mumbai, etc., have been gradually growing the city’s total area to encompass the rising population in the cities. The growing residential and commercial areas have also pushed the demand for power infrastructure, thus maintaining the market size of distribution transformers in the overall market.

Based on End User:

• Power Plants
• Power Utilities
• Residential & Commercial
• Industrial

Out of them all, the industrial segment has been witnessing notable growth in the India Power & Distribution Transformer Market. This can be measured by the fact that the industrial sector of India has been performing well since historical times. The government introduced production-linked incentive (PLI) schemes, which have acted as a major boost to the expansion of existing and new industrial facilities. Chemical, textile, automotive, heavy engineering, iron & metals, pharmaceuticals, defense, etc., are some of the essential revenue-generating industries of India from domestic as well as export demand. The large enterprises in these industries prefer to build their own renewable captive power plants to minimize their power utilization costs and reduce their carbon footprint in the environment. For instance:

• In 2023, Tata Power Renewable Energy Limited agreed to establish a captive solar power plant with a capacity of nearly 39.375 MWp for Sanyo Special Steel Manufacturing India Pvt. Ltd. (SSMI). With this project, the SSMI hopes to offset approximately 42,534 tons of carbon emissions annually.

Such instances to drive environmental sustainability across industries are fueling the demand for power & distribution transformers in the country while simultaneously growing the market share of the industrial sector in the India Power & Distribution Transformer Market.

India Power & Distribution Transformer Industry Recent Development:

• 2024: Transformers & Rectifiers India Ltd. managed to secure an order worth nearly USD 27.89 million from Power Grid for the designing, engineering, manufacturing, testing, and supply of all the critical components for power transmission set-up, including power transformers.
• 2023: Schneider Electric India reported the launch of a new product line, including power transformers, to cater to the growing digitalization in India through expanding its existing manufacturing facility in Bengaluru, Karnataka.

Gain a Competitive Edge with Our India Power & Distribution Transformer Market Report

1. India Power & Distribution Transformer Market Report by Markntel Advisors provides a detailed & thorough analysis of market size, growth rate, competitive landscape, and key players. This comprehensive analysis helps business organizations to gain a holistic understanding of market dynamics & make informed decisions.
2. This report also highlights current market trends & future projections, allowing business organizations to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
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