This week’s news from India is, quite frankly, great. The GDP growth for the year will approach double digits, and the manufacturing PMI remains in the mid-50s. The investments in defense manufacturing are staggering and wide open for FDI. The previously reported Production Linked Incentive scheme (PLI) continues to bear fruit with new manufacturing investments. Li-ion batteries, laptop computers, and appliances have new announcements as well. For more industry intel and other tidbits, read on.2nd quarter GDP grew 20.1% YOY with manufacturing expanding 50%. Overall, annual GDP for 2021 is projected to grow over 9%.
According to the IMF, India’s GDP growth is expected to come in at 9.5% in 2021 and is forecasted to be 8.5% in 2022.
The manufacturing PMI for September was 53.7, up from 52.3 in August.
Industrial output increased 11.9% YOY in August.
The Nomura India Business Resumption Index reached an all-time high of 108.8 for the week ending Oct. 17, indicating a solid recovery.
India attracted $27.37 billion of foreign direct investment (FDI) for April to July, the first four-month period of fiscal year 2021-2022. That is 62% higher than the investments in the same period in 2020.
The defense manufacturing industry continues to evolve and grow due to a steady rise in demand from the military. The government plans to invest about $130 billion over the next five-year period for the modernization of armed forces and has set a defense production target of $25 billion by 2025, including $5 billion of exports.
To boost defense manufacturing, investments are now open to private companies. The automatic limit of foreign investment in the sector has been increased to 74% from the previous limit of 49%. This is even true for certain projects deemed to be of strategic domestic importance.
To promote local manufacturing, the Ministry of Defense has listed 101 items to be barred from import over the next two years.
Despite a strong revival in demand for vehicles, total passenger vehicle sales slumped 31% in September from the month prior due to supply chain constraints, primarily with microchips. Automobile companies have curtailed their overall production volumes by 37% in passenger vehicles and 17% in two wheelers.
U.S.-based clean energy company POWER.GLOBAL is investing $25 million to set up a li-ion battery manufacturing facility in Greater Noida in Uttar Pradesh.
Taking advantage of India’s Production Linked Incentive scheme (PLI), Japanese air conditioning manufacturer Daikin is investing around $150 million to set up their third air conditioning and parts manufacturing plant in Andhra Pradesh. The plant will be operational in 2023. They are the first Japanese company to take advantage of the PLI scheme.
Also using the PLI scheme, India’s Dixon Technologies will make Acer laptops at a new plant. The plant will have an annual capacity of 700,000 units.
India-based Godrej Appliances is investing $15 million to increase their air conditioning manufacturing capacity at their Mohali and Shirwal-based plants.
India’s Shyam Metallics and Energy is investing $425 million to scale up their steel and ferroalloy integrated production capacity at Odisha from the present 5.7 million tons per annum (MPTA) to 11.5 MPTA over the next two years.