The industry should reduce heavy dependency on auto sector. Sectors such as oil exploration, cement, chemical and process industries may hold promises. Expansion to these sectors will reduce periodic and cyclic ups and downs of forging industry.
About 75% forging business is domestic, out of which 70% is from automobile sector. Such a heavy dependence of this sector has its prospects linked to automobile sector. The industry should seek prospects of forged products in other sectors that include oil exploration, railways, defence, steel, cement, sugar, ship building, material handling etc. There is a steady replacement market from oil exploration, cement and chemical process industries due to routine periodic maintenance, and demand from OEM for machine parts

Steel cost is 60-70% of input cost. There are problems of increased cost and reduced availability of forging quality steel. The industry suffers from high cost of energy too.

To increase profitability, the individual forging shops should produce value added products for major customers through horizontal consolidation with small specialised units to perform machining and assembly operations. To improve quality there should be
vertical consolidation between steel producer, forge shop and automobile manufacturers. To reduce cost, the individual units should look for captive power generation. Energy saving technology is conspicuously absent in this sector. Adoption of such technology will reduce cost. Use of better quality die with improved life will reduce operating cost and increase competitiveness, even in export market.