Featured Image

International News From the Field: India

India's rise to become the world’s third-largest economy by the turn of the decade appears inevitable. Its agriculture and agriculture-based industries are rising stars along with automotive and defense. For more industry intel and other tidbits, read on.
Mar 08, 2023

India’s manufacturing PMI for February stood at 55.3, close to the 55.4 recorded in January. The service PMI grew to 59.4 in February from 57.2 in January, the highest since February 2011 and considerably above all forecasts. The Indian economy expanded by 4.4% year over year in the fourth quarter of 2022, slightly lower than the forecasted rate of 4.7%. The reasons included reduced private spending due to rising borrow costs, lower investments, a contraction in government spending, and a decline in exports and imports compared to the third quarter of 2022, when the economy expanded by 6.3% YOY.

As per the latest Crisil report, India’s passenger vehicle sales are expected to grow 9%-10% in the 2023-24 fiscal year. Volume-wise, this would be about 20% above pre-pandemic levels. The projected growth is due to strong demand and an easing chip shortage. India is presently the fourth-largest passenger car market in the world. The SUV segment is rapidly expanding and will account for 55% of total domestic car sales by the end of the fiscal year.

The Automotive Component Manufacturing Association (ACMA) recently projected 10%-15% growth in the industry for the 2023-24 fiscal year, driven by domestic and export market demand. The industry is expected to grow by 15% in the current fiscal year, which ends on March 31, 2023, over the previous year.

During the recently concluded Aero-India show in Bengaluru, over 200 deals worth over $10 billion were signed. The show saw participation from over 800 defense companies, including various startups, state-owned companies, MSMEs, and large companies from India and worldwide. Tata’s owned airline, Air India, placed firm orders for 470 aircraft from Boeing (190 737 MAX airliners, 20 787s, and 10 777s) and Airbus (210 A320/321 Neo/XLRs and 40 A350 900/1000s) with an option to purchase 370 more over the next decade. The total deal value is estimated to be $80 billion, making it one of the largest aircraft orders by an airline in modern aviation history. Similarly, the other Indian private airlines Indigo and Akasa also plan to procure a couple more planes to strengthen their operations. All these orders would create offset possibilities for these companies to source or manufacture parts and services from India worth over 30% of the order value.

The Tamil Nadu government recently announced a new EV policy with a target to attract over $6 billion in investment in the EV space. The policy provides various SOPs, including the reimbursement of the state-levied goods and services tax (SGST), investment and turnover-based subsidies, an advanced chemistry cell subsidy, public and commercial transport electrification, etc.

A few recently announced projects and investment news items are listed below.

  • Ola Electric is investing around $950 million to set up an EV battery cell and electric four-wheeler manufacturing plant in the Krishanagiri district in Tamil Nadu.

  • GE Marine and Hindustan Aeronautics signed an MOU to explore the expansion of HAL’s manufacturing capabilities, including assembly, inspection, and testing of the LM500 marine gas turbine installed aboard the Indian Navy’s P-17, P-17A, and IAC-1 vessels.

  • Renault-Nissan plans to invest over $600 million over the next five years to expand its manufacturing capacity at its plant near Chennai.

  • Mahindra is setting up a three- and four-wheeler EV plant in Telangana, with an investment of around $125 million.

  • Hero MotoCorp partnered with U.S.-based Zero Motorcycles to collaborate on premium electric motorcycles. Hero MotoCorp approved an equity investment of up to $60 million in Zero Motorcycles in September 2022.

  • UNO Minda is setting up a manufacturing facility in Alwar, Rajasthan, to expand their capacity to produce control systems, safety and security devices, and seat belt segments for automotive applications. The investment is worth $50 million.

For more information, please contact Arun Mahajan at AMahajan@AMTonline.org.

PicturePicture
Author
Arun Mahajan
Director - Chennai Tech Center
Recent international News
To the Moon! India’s economy is growing faster than it has in the past year and is poised to continue along this path with big aspirations in mining, automotive, aerospace, and various other sectors. For more industry intel and other tidbits, read on.
India remains strong with increased manufacturing and industrial production. With big goals for drones, a paradigm shift in defense, booming auto sales, and much more, India's market continues to impress. For more industry intel and other tidbits, read on.
Big deals between India and the United States are in the works. With growth in aerospace and automotive and investments in R&D and production, India is set to become a global defense manufacturing hub. For more industry intel and other tidbits, read on.
India's prominent growth is reflected in its record-setting collected taxes. High-tech sectors like EV, semiconductors, aerospace, and medical are growing, and automotive attracts foreign investment. For more industry intel and other tidbits, read on.
India’s young, tech-savvy population has surpassed China’s. While its population boom offers large-scale opportunities for business, how will India overcome infrastructure and regulatory challenges? For more industry intel and other tidbits, read on.
Similar News
undefined
International
By Fred Qian | Sep 19, 2023

Despite early signs of recovery and expansion in various sectors, including robotics, China is experiencing some headwinds. How serious is the country’s economic slowdown? What comes next? For more industry intel and other tidbits, read on.

5 min
undefined
Technology
By Bonnie Gurney | Sep 12, 2023

Registration has opened for IMTS 2024 – The International Manufacturing Technology Show, taking place Sept. 9-14 at McCormick Place in Chicago.

5 min
undefined
International
By Arun Mahajan | Sep 05, 2023

To the Moon! India’s economy is growing faster than it has in the past year and is poised to continue along this path with big aspirations in mining, automotive, aerospace, and various other sectors. For more industry intel and other tidbits, read on.

5 min