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International News From the Field: India

India’s manufacturing sector remains strong with the manufacturing Purchasing Manager’s Index (PMI) remaining well above 50 since July of last year. The government and the private sector are seeing that it remains that way with massive investments ...
Feb 10, 2022

India’s manufacturing sector remains strong with the manufacturing Purchasing Manager’s Index (PMI) remaining well above 50 since July of last year. The government and the private sector are seeing that it remains that way with massive investments, and the list is long: $7 billion worth of steel plant investments; hundreds of millions in two-wheel EV production; $200 million for oil rig manufacturing; and, on the sustainable energy side, $2.6 billion earmarked for solar panel production. For more industry intel and other tidbits, read on.

  • India’s manufacturing PMI continues its strong trend, registering 54 for January. It has remained well above 50 since July 2021.

  • According to a survey by the Federation of Indian Chambers of Commerce & Industry (FICCI), the manufacturing outlook showed a sharp improvement in the final quarter of 2021. Of its respondents, 63% reported higher production in the period. More than 60% reported a higher number of orders than the previous quarter, and the average manufacturing capacity utilization was almost 70%, reflecting sustained economic activity in the sector. 

  • A recent report from Ernst & Young and the Digital Infrastructure Providers Association (DIPA) stated that an investment of $23 billion is needed in India over the next four years to support the growing demand of digital services and rising online traffic. As many as 330 million people will be using 5G, and sectors like e-commerce, education, and health care will grow their presence online. 

  • To give further impetus to the defense manufacturing industry, the most recent government budget reserves 25% of the annual R&D budget of the Defense Ministry for private companies and startups. The move will help break the monopoly of state-owned enterprises and facilitate private sector development of military technologies.     

  • There has been a wide array of recent investments announced for upgrading the overall infrastructure, especially in railways, roads, airports, and seaports. Significant capital expenditures are expected.  

  • The IMTEX machine tool show has been postponed and will now take place June 16-21, 2022. The show will focus only upon metal forming technologies and digital manufacturing. The metal cutting-focused IMTEX show will take place Jan. 19-25, 2023. 

  • Fisker Inc., the U.S. electric vehicle automaker, is setting up a technology center in Hyderabad. Within two years, in a venture with Foxconn, it will locally manufacture the PEAR, a smaller EV designed to appeal to younger buyers. 

  • A 350-acre medical device park is in development in Noida, near Delhi. The park will focus on the industrial development of CT scanning devices, MRIs, and ventilators. 

  • Drillmec SpA, a global leader in oil field equipment supply from Spain, is investing $200 million for oil rig and ancillary equipment manufacturing in Telangana.

  • India’s Bajaj Auto is investing $150 million under the production-linked incentive (PLI) scheme to accelerate two- and three-wheel EV production.

  • South Korea’s Posco-Adani Group will jointly build an integrated steel plant at Mundra, Gujarat, with an investment of $5 billion. 

  • India’s JSW Steel Ltd. is investing $2 billion to increase its steel-producing capacity by 5 million tons per annum (mtpa) at its Vijayanagar plant in Bellari, Karnataka. It presently produces 13 mtpa.

  • One Moto, the British two-wheel EV brand, plans to build a manufacturing facility near Hyderabad with a $33 million investment.

  • India has outlined a plan to spend $2.6 billion to boost the local manufacturing of solar modules. 

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Author
Arun Mahajan
General Manager - AMT India Operation
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