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International News From the Field: India

India’s manufacturing PMI ended the year at 56.4, a very healthy number. The unemployment rate has dropped to 6.5%, a further sign of recovery. Passenger vehicle sales in December rose by nearly 14% year-over-year...
Feb 01, 2021

February 1, 2021

India’s manufacturing PMI ended the year at 56.4, a very healthy number. The unemployment rate has dropped to 6.5%, a further sign of recovery. Passenger vehicle sales in December rose by nearly 14% year-over-year. According to the latest U.N. report, globally, FDI inflow was down by 42% compared to 2019. However, in India, it increased by 13% as foreign investors took advantage of the growing economy, numerous business opportunities, and government incentives. For more industry intel and other tidbits, read on.

  • The India government’s Production Linked Incentive (PLI) scheme is proving to be a game-changer and is catalyzing the country’s pace of economic recovery. Under the PLI scheme, manufacturers receive incentives on incremental sales from products manufactured domestically. The scheme incentivizes foreign companies to set up manufacturing in India and encourages local companies to set up new production facilities or expand their existing ones. It is estimated that the PLI scheme is likely to add over $520 billion to the country’s GDP over the next five years. Below are the incentive outlays across several of the manufacturing sectors.

  • Tesla Inc. registered its Indian entity in Bangalore. Tesla plans to launch its Model 3 in June of this year.

  • New Jersey-based Triton Electric is planning to invest $1 billion in India. Recently, the company launched its electric sedan, Model N4, in India.

  • Japan-based Daicel Corp. is setting up an airbag inflator manufacturing plant in Chennai. The initial investment is likely to be around $35 million.

  • MG Motor India (SAIC Motor) plans to invest around $70 million to enhance production capacity at their Gujarat-based manufacturing plant.

  • Fiat Chrysler Automobiles (FCA) is planning to invest $400 million in India to launch a new line of SUVs.

  • Bajaj Auto is investing $95 million to setup a new manufacturing facility in Chakan, Pune.

  • The Ministry of Defense approved the procurement of 83 LCA-Tejas fighter jets, valued around $7 billion, from Hindustan Aeronautics Limited (HAL).

international-news-from-the-field-india-4 international-news-from-the-field-india-4

For more information, contact Arun Mahajan (AMahajan@AMTonline.org).

Arun Mahajan
General Manager - AMT India Operation
Recent international News
There is lots of good news to report from India, not the least of which are the economic stats. The manufacturing PMI remains healthy at 52.3, and the GDP is still projected to grow by 9% in 2021. In a recent C&W report, India ranked No. 2 in the world ...
India’s industry is humming along at a pre-pandemic pace, if not better. The PMI is above 55. Vehicle sales are up 34% YOY, with commercial vehicles up 165%. The new Vehicle Scrappage Policy was launched, which will attract billions of dollars in new ...
Due to the pandemic’s second wave in India, June’s manufacturing Purchasing Managers’ Index (PMI) contracted, dipping below 50 for the first time in 11 months. However, the worst is over, and the business resumption index jumped from 92% to 96% last week.
Since the second week of May, the effects of India’s COVID-19 resurgence that has held the world’s attention have subsided. The lockdowns are easing, and local businesses are opening again.
The ADB still predicts India’s GDP will rebound strongly at 11% in FY 2021 due to continued economic recovery stimulated by increased public investment, the vaccine rollout, and the surge in domestic demand.
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