Chennai, April 29 (IANS): The Indian foundry industry is expected to double its revenues over the next three years with the central government's major push in railway infrastructure and defence sectors, said the Indian Institute of Foundrymen (IIF) on Saturday.

The IIF also said it plans to set up a Centre of Excellence for casting technology and a skill development centre in Coimbatore in Tamil Nadu.

In a statement issued here, IIF said the Indian foundry industry currently has an annual revenue of $18 billion out of which $2.7 billion is exports.

The revenue is expected to double over the next three years with the huge opportunity which will be unlocked due to a major push in railway infrastructure, defence and revival of the automotive sector.

According to IIF, it plans to set up a centre of excellence for casting technology and a skill development centre in Coimbatore at an outlay of Rs 40 crore. A model foundry will be set up to give the workers hands-on training.

Out of the total project cost, Rs 30 crore is expected as a grant from the central government and the balance is to be collected from IIF members.

"Demonetisation has had an impact on the foundry industry for sourcing domestic metal scrap. There has been a 20-30 per cent drop in production against the anticipated growth of 10 to 15 per cent. Demand has slipped and end users are feeling the pinch," Anil Vaswani, President, IIF was quoted as saying in the statement.

He said by the time demonetisation's effect fades away, the Goods and Services Tax regime would kick in and hence business will continue to be dull for another six months.

"2017 may not be a good year for business but we expect it to revive in 2018," Vaswani added.

According to IIF, there have been some signs of demand growth of late in auto, earth moving, material handling and tractors. Defence, aerospace, railways and capital goods will create a substantial demand for foundries.