India’s manufacturing PMI remained strong in August, clocking 58.6 against July’s 57.7, marking 26 months of sustained expansion since the pandemic struck. August’s services PMI went down to 60.1 against 62.3 in the previous month, which was the highest expansion in the last 13 years.
India’s GDP grew 7.8% year over year in the second quarter of 2023, up from 6.1% in the first quarter, remaining a bright spot in the global economy. The growth was driven by buoyancy in the services sector, accompanied by strong consumer demand and increased government capital expenditure. The economy is projected to grow by 6.5% in the current fiscal year.
India’s Chandrayaan-3 lunar-exploration mission successfully landed its Vikram lunar lander near the south pole of the moon and launched its Pragyan lunar rover on Aug. 23. The total cost of the project was less than $75 million. This was possible due to the contributions of several Indian companies and the country’s aerospace ecosystem. The contributing companies supplied various parts for the lander and rover, provided engineering support, and worked with the Indian Space Research Organization to achieve this feat. These companies included Tata Consulting Engineers, Larsen & Tubro, Walchandnagar Industries, Godrej & Boyce, Centum Electronics, Ananth Technologies, Omnipresent Robotic Technologies, Semiconductor Laboratory, Hindustan Aeronautics, Bharat Heavy Electrical Ltd., MTAR Technologies, Mishra Dhatu Nigam, Keltron, Jindal Stainless Steel, Vajra Rubber Products, Kortas Industries, Kerala Minerals and Metals, and others.
The auto parts industry saw its highest ever turnover in the 2022-23 fiscal year. The sector had a turnover of $68 billion for the year, up 33% from $51 billion in the 2021-22 fiscal year. Further, the sector will likely grow by double digits in the current 2023-24 fiscal year.
India’s auto retail sector saw 10% YOY growth in July 2023, showcasing its resilience and mirroring the previous month’s growth. The two-wheeler segment grew by 8%, passenger vehicles grew by 4%, the three-wheeler segment by 74%, the tractor segment by 21%, and trucks and other commercial vehicles by 2%. With the festive season starting next month, the Federation of Automobile Dealers Association is very optimistic about retail sales growth.
On Aug. 29, Toyota Motors India introduced the world’s first car that can run entirely on alternative fuel ethanol and is equipped with a flex-fuel engine. Based on the Toyota Innova HyCross, this electrified flex-fuel prototype not only uses alternative fuel but is able to generate power on its own and run in EV mode. The car is Euro-6 emissions compliant.
The Indian government amended the Mines and Mineral Development Act and has given access to private companies to mine critical minerals like lithium and others. Earlier, only state-owned companies were allowed to mine these minerals. The private companies can now identify potential mining areas and get a license to mine through auction. This would directly boost the mining and associated industries in the country.
The Indian air force plans to order 100 more LCA Mark1A light combat fighter aircraft from Hindustan Aeronautics Limited. The demand was created to replace the aging MIG-21 fighter squadrons. The Indian Air Force presently has 40 LCAs, over 180 LCA Mark-1As, and would receive at least 120 Mark-2 planes over 15 years. The HAL program has been the precursor of the government’s much promoted “self-reliance” program.
A few recently announced projects and investment news items are listed below.
U.S.-based First Solar plans to invest billions of dollars in India for solar panel production.
Indian solar module-maker Jakson Group plans to diversify into power generation, adding 5 GW of power capacity by 2030. The group plans to invest about $3 billion to build this capacity.
AMD announced an investment of $400 million in India for a 500,000-square-foot design center, its largest, in Bengaluru.
India’s largest carmaker, Maruti-Suzuki, plans to invest around $6 billion over the next seven years to double its production capacity to four million units per year.
India’s largest engineering and construction company, Larsen & Toubro, is planning to invest around $12 billion across its businesses over the next five years. The company plans to invest most of it in expanding its clean and green energy business. The company intends to build 2 million to 3 million tons of green hydrogen and ammonia capacity.
Foxconn wants to set up its third global electric vehicle manufacturing base in India. The company acquired a plant in Ohio and another in Thailand, established through a JV with state energy company PTT. The plan is to capture 5% of sales worldwide by 2025. The company aims to deliver between 500,000 and 700,000 vehicles by then.
Foxconn is investing around $400 million to manufacture AirPods and other digital peripherals at its Kongarkalan facility in Telangana.
Hyundai Motors India has finalized the deal to take over General Motors’s plant in Talegaon, Maharashtra. The deal would allow Hyundai to achieve a cumulative production capacity of 1 million car units annually. The company sold 552,511 vehicles in the last fiscal year.
Saint-Gobain India is investing around $1 billion over the next four to five years to fund capital expenditure and acquisitions to grow their glass manufacturing capacity in India.
The ACME clean energy group plans to invest around $3.5 billion in phases to establish a green hydrogen and green ammonia project in Gopalpur in Odisha.
Hindalco Industries and Texmaco Rail & Engineering have entered a strategic alliance to manufacture aluminum rail wagons and coaches for Indian Railways.
For more information, please contact Arun Mahajan at AMahajan@AMTonline.org.