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International News From the Field: India

India’s manufacturing PMI for August remained strong at 56.4 as it overtook the U.K. to become the world's fifth-largest economy. Investments grew in EV, green energy, smart devices, drones, and more. For more industry intel and other tidbits, read on.
Sep 22, 2022

India’s manufacturing PMI for August remained strong at 56.4 on the expansion side, a tad lower than July’s 56.4, signaling the second-most robust expansion in the sector since last November. Services PMI rose to 57.2 from 55.5 in July. Earlier this month, India overtook the U.K. to become the world's fifth-largest economy in terms of nominal GDP size. India's economy grew 13.5% year-over-year in the April-June quarter, while overall annual GDP growth is likely to be around 7% per the last IMF projection.

Expectations are that India will manufacture over 12% of the FOB value of Apple phones sold globally. The three major assemblers of iPhones in India – Foxconn, Wistron, and Pegatron – have committed to manufacture over $15 billion worth of phones by 2025-26. By the end of 2022, India should already be producing around 5%-7% of Apple’s global supply.

According to the India Energy Storage Alliance (IESA) report, the market for electric vehicles in India is expected to grow at a CAGR of 49% between 2021 and 2030, with annual sales in the segment estimated to surpass 17 million units by 2030. Additionally, the government is also working to reduce the tax structure on hybrid vehicles. Presently an EV is taxed at 5%, whereas small hybrids are taxed at 28% and larger ones at 43%; for ICE vehicles, the taxes are 29% on smaller ones and 45% on larger ones.

According to the Auto Components Manufacturers Association (ACMA), India’s auto component sector recorded its highest revenue turnover of $52.59 billion for the fiscal year 2021-22, growing 23% as a result of good aftermarket and export growth. Imports of auto parts increased by 33%, and exports increased by 43% for the same period.

Drone manufacturing is a “sunrise” sector in India. The market is projected to reach $4.2 billion by 2025 and reach $23 billion by 2030. The government recently announced the second provisional list of beneficiaries of the government’s Production-Linked Incentive scheme, which is worth in total over $20 million to boost the sector.

A few recently announced projects and investment news are listed below:

  • JSW Steel signed a memorandum of understanding (MOU) worth over $1.26 billion with Germany-based SMS group to reduce carbon emissions at their steel mills.

  • The Adani group is investing $5.2 billion to set up an alumina refinery in Odisha.

  • Suzuki Motors is investing $2.5 billion to set up EV battery units at their upcoming automotive plants in Haryana and Gujarat.

  • Larsen & Toubro is planning to invest $2.5 billion in green energy. The company would be investing in producing green hydrogen fuel and manufacturing critical components such as electrolyzers and advanced cell batteries, etc.

  • Bharat Forge’s Kalyani Powertrain Limited (KPTL) has signed a JV with Harbinger Motors Inc. to develop electric drivetrain solutions for the commercial market. The JV company is called ElectroForge and is based in Pune, Maharashtra.

  • The Tata Group is planning to invest over $90 billion in new industries such as mobile components, semiconductors, EVs, batteries, renewable energy, and e-commerce by the year 2027.

  • Consumer electronics brand Elista is planning to set up a new manufacturing unit for manufacturing smart TVs in the northern part of India.

Arun Mahajan
General Manager - AMT India Operation
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