India’s manufacturing PMI for February was 56.9, a slight improvement over January’s reading of 56.5. The economy witnessed strength in demand and the highest growth in new export orders since the last 21-month period. The services PMI clocked 60.6 in February against 61.8 in January. In the third fiscal quarter, GDP growth surged 8.4%, the most robust growth since the second quarter of 2022. The overall annual rate of GDP growth for fiscal year 2023-24 is expected to be over 7.5%. GDP growth projected for the next fiscal year, starting April 1, 2024, is 7%.
The Indian government approved the development and prototype production of the Advanced Multirole Combat Aircraft, a fifth-generation fighter jet. The aircraft is slated to take flight by 2028, and it will boost the Indian air force's combat capabilities and bolster the domestic manufacturing ecosystem. A special-purpose vehicle formed between Hindustan Aeronautics Ltd. and private sector partner companies would undertake the developmental process.
There is a major push toward semiconductor chip manufacturing in India:
Tata Group recently laid the foundation stones for two of their semiconductor chip fabrication facilities. Tata Powerchip Semiconductor Manufacturing Corp. (PSMC) is coming up in Dholera, Gujarat, with an investment of around $11 billion. It would be India’s first commercial semiconductor fabrication facility. The Tata OSAT (outsourced assembly and testing) project is coming to Morigaon, Assam, with an investment of around $3.25 billion.
The CG Power-Renesas OSAT project, a joint venture of CG Power and Industrial Solutions Ltd. in India and Thailand-based Stars Microelectronics, also laid the foundation stone for their manufacturing plant in Sanand, Gujarat, with a planned investment of around $1 billion.
Kayes Semicon is investing $500 million to develop a semiconductor OSAT/ATMP (assembly, testing, marking, and packaging) plant in India.
According to the Automotive Components Manufacturers Association (ACMA), the Indian auto industry is planning to invest up to $7 billion by fiscal year 2028 to facilitate the localization of advanced components like electric motors, airbags, electronic stability control units, ventilator fan systems, and automatic transmissions.
The Society of Indian Automobile Manufacturers (SIAM) announced that India’s passenger vehicle sales surged to a record high in February, reaching 370,786 units, a 10.8% year-over-year increase. Total passenger vehicle exports rose by 20.4% to 53,043 units in the month. Overall, the passenger vehicle industry projects upward growth of 9% for the present fiscal year.
In the past decade, India’s mobile phone manufacturing sector has seen a 21-fold increase in value, reaching $49.3 billion. India now fulfills 97% of its mobile phone demand domestically, with 30% of the production in fiscal year 2024 slated for export, which is projected to reach $14.4 billion.
A few recently announced projects and investment news items are listed below for your reference.
Tata Motors is setting up a new automotive plant in Ranipet, Tamil Nadu, with a proposed investment of around $1.1 billion to be made over the next five-year period.
Hyundai Motors India has recently committed to investing $4 billion to increase capacities at its Maharashtra and Tamil Nadu manufacturing facilities, launch new products, set up battery pack assembly units, and more.
Adani Aerospace and Defense’s ammunition factory operations inaugurated its manufacturing plant in Kanpur, Uttar Pradesh. The facility was established on over 500 acres of land with an investment of around $350 million. The factory will produce small, medium, and large caliber ammunition for the armed forces, paramilitary forces, and police.
Ford Motors is set to return to India, where it will emphasize production of EVs and hybrids.
Vietnam-based VinFast initiated construction of their $500 million EV plant in Tamil Nadu. The plant would be spread over 400 acres and have an initial annual capacity of 150,000 units.
Ashok Leyland broke ground for their new e-bus factory near Lucknow, Uttar Pradesh. The facility would be spread over 70 acres and could produce 2,500 electric buses annually.
Punjab-based Sonalika Tractors is setting up a new tractor assembly plant and another facility for a high-pressure foundry in Hoshiarpur. The total combined investment is $150 million. The assembly plant is being exclusively built to fulfill export commitments, increasing the company’s annual capacity by an additional 100,000 tractors.
For more information, please contact Arun Mahajan at AMahajan@AMTonline.org.
