A whole range and variety of cables manufactured today in India includes PVC / FRLS cables, XLPE cables, submarine cables, aerial bunched conductor cable, telecommunication cable such as jelly filled cables, optical fibre cables etc. The cable industry may be mainly divided into four segments viz; housewiring (upto 440V), LT (1.1 to 3.3kV), HT (11 to 66kV), EHV (66kV).

There is a definite upward technological movement alongwith the growth rate in cables and wire industry in India. But consumption has fallen by more than the rate of growth. Slow down in power generation sector has direct effect on cable industry and its power segment, in particular, resulting into reduced demand as State Electricity Boards (SEBs) are the principal customers of this segment. The LT cable segment and housewiring segment show moderate increase because of infrastructure and construction boom.

The demand for optical fiber cable is expected to grow at compounded annual growth rate of 17% to 1.8-2.4 million fiber kilometers over the next 3 years as producers are reporting healthy order book position on the back of increased demand for broadband deployment. But at the same time, price realization for OFC will decrease owing to competition from global players as custom duties have been abolished under the IT agreement with effect from April 1, 2005.

Large-scale deployment using wireless services is expected to limit the demand for wireless services, thus adversely affecting Jelly filled telecom cables (JFTC) demand. The demand for JFTC is expected to decline at compounded annual rate of 11% between 2003-04 and 2006-07and will eventually be restricted to replacement and maintenance demand. Intense competition will continue to strain the margins of JFTC producers over the medium term.

The abolition of the custom duty on JFTC and OFC in the budget is expected to have a negative impact on domestic producers. The reduction in the custom duty on raw materials like copper, polyethylene and polypropylene will partially offset the decrease in the duties on finished goods.

A major worry of the cable manufacturers is exorbitant cost of raw material namely aluminium, copper, XLPE and PVC compounds accounting for close to 60% of the production cost. Due to this, Indian cable makers are left behind in global competitiveness.

However, the industry hopes that with increase in government spending on the infrastructure and restructuring of SEBs, the fortunes of the industry will improve.