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International News From the Field: India

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.
Jun 01, 2023

India witnessed strong business activity in the last quarter. Record goods and services tax collection numbers for the period shows strengthening economic activity. The index of industrial production and eight core industries index averaged steady growth, adding to capacity utilization, which is hovering near 75%.

Backed strong demand from rising factory orders, May’s PMI hit a 31-month high of 58.7 compared to April’s 57.2. The surge in sales paved the way for stronger increases in production, employment, and quantities of purchases.

According to a survey conducted by the Confederation of Indian Industry, as many as 163 Indian companies have invested over $40 billion in the United States and have so far created nearly 425,000 jobs there.

A few recently announced projects and investment news items are listed below for your reference. Kindly reach out to learn more about these listed projects.

  • Earlier this month, the Tesla team met with the government to discuss their plans for setting up a manufacturing plant in the country. Presently, they have initiated their scouting process for finding a suitable location for their proposed manufacturing setup. 

  • Hyundai Motors plans to invest around $2.43 billion as part of its next phase of mega investment in India to modernize its existing plant, make EVs, and build associated ecosystems and alternative fuel technologies like hydrogen mobility. According to a recent survey report by the Economic Times, automakers in India plan to invest around $10 billion over the next 10-year period to enhance their EV manufacturing capacity. Investments would be made to build a robust infrastructure for the EV ecosystem. The capital expenditure will be allocated toward building greenfield plants, research and investments in battery plants, and support grid charging infrastructure. The plan is to create manufacturing capacity to build around 2 million EVs and scale it to 7.2-7.5 million units by 2030. 

  • MG Motors recently announced its India 3.0 plan in which the company plans to invest around $650 million from 2026-28 to expand its facility in Halol, Gujarat, and create around 20,000 direct/indirect jobs.   

  • Sona Comstar partnered with U.K.-based Equipmake to develop high-performance electric powertrains. Equipmake will license certain patented spoke motors and inverter technology from 100 kW to 440 kW to Sona Comstar. This will allow the company to manufacture and sell EV powertrains, subsystems, and components for electric cars, buses, commercial vehicles, and off-road vehicles.

  • Tata Group is looking into exploring the semiconductor sector. The investments are being lined up either to broaden the scope of its existing mobile component manufacturing unit or set up an outsourced semiconductor assembly and test unit in Tamil Nadu’s Krishnagiri district. Tata Group has already acquired Apple supplier Wistron’s facility near Bangalore. 

  • The state of Tamil Nadu recently signed six MOUs with Japanese companies in the field of automotive spares, construction engineering, metals used in space and defense, and construction. These companies include KyoKuto Satrac, Mitsuba, Shimizu Corp., Kohyei, Sato-Shoji Metal Works, and Tofle.   

  • Garuda Aerospace and Naini Aerospace Engineering (a subsidiary of HAL) have signed a joint development partnership to manufacture advanced precision drones. They have set a target of 5,000 drones in their first year of operation.  

  • Medical tech firm Medtronic is planning to invest $350 million to set up a research and development center in Hyderabad. 

  • Cisco plans to start manufacturing in India, creating a “core” base. It is targeted to generate output worth $1 billion in exports and domestic production capacity. The new facility will be built in Tamil Nadu.

  • JSW Steel is investing over $1.3 billion to set up an 8-million-ton-per-annum pellet plant and associated slurry pipeline from its iron ore mines to the plant in Paradeep, Odisha. 

  • Mitsubishi Electric is investing around $250 million to set up a new air conditioner and compressor facility near Chennai.  

  • Japanese major Omron will open its first medical device manufacturing factory in Tamil Nadu. Omron will make devices, including blood pressure monitors, and invest around $15.7 million to set up the plant.

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

Arun Mahajan
Director - Chennai Tech Center
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