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International News From the Field: India

India's manufacturing and services PMI numbers remain strong as employment activity rose to a 33-month high. Big investments in defense, renewable energy, semiconductors, and automotive continue. For more industry intel and other tidbits, read on.
Nov 15, 2022

Backed by strong demand and output, India’s manufacturing PMI remained resilient in October, rising to 55.3 from 55.1 in September. The country’s services PMI grew to 55.1 from 54.3 in September. Employment activity in September rose to a 33-month high.

The Airbus and Tata Consortium joint venture held a groundbreaking ceremony for a manufacturing plant in Vadodara, Gujarat, providing a significant boost to the Indian government’s “Make in India” program. The plant will manufacture C-295 military transport aircraft for the Indian air force. Out of 56 aircraft on order, 16 will come in “flyaway” condition, and the rest will be manufactured at the plant. Manufacturing will commence in 2025, and the plant will cater to Indian military requirements and export the aircraft to other countries.

The government announced a $10 billion incentive plan to boost semiconductor manufacturing in India. A few major international companies – Vedanta-Foxconn JV, IGSS Ventures, and ISMC Digital – have committed investments of over $20 billion to set up electronic chip manufacturing plants in India.

Godrej & Boyce is strengthening India’s defense sector with its indigenous manufacturing prowess. The company serves the defense sector through several of its businesses in material handling, tooling, security solutions, aerospace, and precision engineering. The group continuously invests in capacity expansions, technology partnerships, and R&D. It is presently setting up a greenfield facility of over 100,000 square meters for business in Khalapur, Maharashtra.

Here are a few recently announced projects and investment news items.

  • Baldota Group will invest around $2.2 billion to build a 3.5-MTPA-capacity integrated steel plant in the Koppal district in Karnataka.

  • Epsilon Advanced Materials, a wholly owned subsidiary of Epsilon Carbon, signed an MOU with the Karnataka government to establish a battery material manufacturing plant in the state with an investment of $1.1 billion over a 10-year period.

  • JK Tyre & Industries projects a $150 million CAPEX for two years to expand production capacity to meet the increase in domestic tire demand.

  • Hero Electric is investing $350 million to build an additional capacity of 4 million units of electric two-wheelers by 2026. The investment would be carried out in their Rajasthan-based manufacturing facility.

  • Pune-based defense conglomerate Kalyani Group plans to set up the world’s largest artillery manufacturing facility. Presently the group produces around six guns per month, and the capacity would be increased to one gun a day.

  • Green energy company ReNew Power is planning to invest around $4 billion over the next two years to scale up its solar and wind energy capacities. The company currently has an aggregate total of 13.2 GW.

  • Auto parts maker UNO Minda is setting up a JV with Japanese firm Tachi-S to manufacture and market seat recliners for four-wheeler passenger vehicles. The JV will offer recliners, seating mechanisms, seat frames, and complete seating assemblies in the first phase.

  • Indian defense firm Bharat Forge has inked an agreement with U.S.-based energy and defense corporation General Atomics to collaborate on developing lithium-Ion battery systems for a naval platform for the Indian navy.

  • In addition to Foxconn already manufacturing and supplying the iPhone 14 in India, Apple has also given the go-ahead to Pegatron to start assembling it there as well.

Arun Mahajan
Director - Chennai Tech Center
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