India remains the world's fastest-growing major economy, clocking a 54.6 PMI for May. And with major investments and initiatives aimed at EV, defense, and tech development, India looks to keep it going. For more industry intel and other tidbits, read on.
India’s manufacturing PMI for May stood at 54.6 against 54.7 in April, marking the 11th straight month of expansion in the manufacturing sector as both output and new orders grew at the same pace as a month earlier. Services PMI climbed to 58.9 in May 2022, the highest since April 2011, against 57.9 in April 2022.
India’s industrial production jumped 7.1% year-over-year in April 2022, advancing from an upwardly revised 2.2% rise the previous month and beating market expectations of a 5.1% increase. It was the most substantial growth in industrial activity since August of 2021 as output accelerated for all sectors.
As per the latest report from Goldman Sachs, new investments and ordering activities witnessed a sharp pickup in 2022. The manufacturing sector jumped 210% compared to 2020-2021 and 460% compared to 2019-2020.
Due to the present geopolitical situation, high inflationary pressures, and an uneven labor market recovery curbing private consumption and investment, India is expected to grow by 6.4% in 2022, down from 8.8% in 2021. This would still make the country the fastest-growing major economy in the world.
With the continuing global shortage of semiconductors, total passenger vehicle sales slumped by 10% (251,581 units) in April, reversing sharply from 6.3% growth (279,501 units) in March 2022. Every year, overall car sales dropped by 3.8%.
As per the SIPRI report, India spent $76.6 billion (0.9% growth over 2020) in military spending in 2021, which was the third highest in the world, following the United States’ $801 billion and China’s $293 billion. There is a strong thrust from the government to enable and encourage local manufacturing of defense equipment for the Indian defense forces and exports to the other countries.
To foster the development of the Internet of Things and artificial intelligence in India, the Centre of Excellence – IoT & AI, Ministry of Electronics and Information Technology (MeitY), the Department of Science and Technology (DST), and the government of Gujarat, in collaboration with NASSCOM, have set up the world’s first Smart Manufacturing Competency Centre ( SMCC). The center will engage startups and technology solution providers to showcase the capabilities of their solutions to manufacturing leaders. The idea is to help create a collaborative ecosystem that will bring together solution seekers and providers under one virtual roof.
A few recently announced projects and investments news items are listed below:
Maruti gets the final nod for setting up 800 acres for a passenger car manufacturing plant in Sonipat, Haryana, with an initial investment of $1.5 billion.
Mahindra will invest $2 billion over two years to strengthen its auto, farm, and EV business.
Toyota plans to invest over $624 million to make EV components in India.
Tata Motors signed MOU to take over Ford’s Sanand, Gujarat, plant. The plant would be used to manufacture and grow its EV business.
Omega Seiki is investing around $250 million in Karnataka to set up a three-wheeler EV plant.
PMI Electro is setting up an electric bus manufacturing plant in Chakan, Maharashtra. The plan is initially set up for an annual capacity of 2,500 vehicles.
Startup company Log9 is on its way to setting up India’s first lithium-ion cell manufacturing gigafactory by 2025.
U.K.-based JCB is investing around $150 million in setting up export-oriented critical parts and component manufacturing units in Vadodara.
Okinawa Autotech and Italian manufacturer Tacita entered into a JV to manufacture electric scooters and performance motorcycles in India. The Rajasthan-based manufacturing plant will commence production in 2023.
Pune-based Badve Engineering and Israeli startup EVR motors made a strategic arrangement for manufacturing Trapezoidal Stator Radial Flux Permanent Magnet (TS-RFPM) electric motors in India. The prototype is under development, and the company plans to ramp up its production to an annual capacity of half a million units by mid-2023.