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International News From the Field: India

Business conditions in India continued improving in December with a 57.8 manufacturing PMI. Overall, the 2022 manufacturing PMI averaged around 53.7, and the services PMI grew to 56.4 in November. For more industry intel and other tidbits, read on.
Jan 04, 2023

With business conditions consistently improving, India’s manufacturing PMI recorded its highest rating since October 2020. It rose to 57.8 in December 2022 from 55.7 in November and 55.3 in October. Overall, the manufacturing PMI in 2022 averaged around 53.7. The services PMI grew to 56.4 in November 2022 from 55.1 in October.

According to India’s Federation of Automobile Dealers Association (FADA), November 2022 saw the highest sales in the history of the country’s automobile industry. Auto sales registered a growth of 26% on an annual basis, clocking a total of 2.38 million units. All categories of automobiles saw annual growth in November: two-wheelers (23.6% – 1.84 million); passenger vehicles (21.3% – 0.3 million); commercial vehicles (32.8% – 0.079 million); tractors (56.81% – 0.077 million); and three-wheelers (80.34% – 0.074 million).

According to Moody’s Investment and Credit Rating Agency (ICRA), due to solid domestic OEMs and pent-up aftermarket demand in India, auto component suppliers are likely to see 8%-10% revenue growth this fiscal year. The industry grew by 29% YOY in the first half of the current fiscal year.

To boost bilateral relations, business, and trade, as well as promote interpersonal connections and cultural exchange, India and Australia signed a free trade agreement, the Australia-India Economic Cooperation and Trade Agreement, that became effective December 2022.

On Nov. 18, India’s first private company, Skyroot Aerospace, successfully launched India’s first private rocket, the Vikram-S. The rocket is six meters long, made of an all-carbon-fiber core structure, and weighs 550 kg. It was single-staged, spin-stabilized, and used solid propellant fuel. It carried three customer payloads with it. The company intends to launch at least two rockets every month from the end of 2025 and plans to create reusable rocket engines.

Harley Davidson and its Indian partner, Hero MotoCorp, are co-developing middle-weight segment bikes (between 350 cc and 850 cc). The bike is expected to launch around the end of 2023 and will be sold independently through the two brands’ sales channels.

To curb imports, the Indian government plans to introduce a Production-Linked Incentive scheme to promote container manufacturing in the country.

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

  • Tata Group has lined up an investment of $90 billion over the next five years across its existing and new businesses, including semiconductor manufacturing and electric vehicles.

  • Mahindra & Mahindra are planning to invest over $1.3 billion in setting up an EV manufacturing plant in Pune.

  • Renault-Nissan plans to invest around $500 million to expand their manufacturing capability at their Chennai-based facility.

  • Amara Raja Batteries has signed an MOU with the Telangana government to set up state-of-the-art research and manufacturing facilities for lithium-ion batteries. They have committed an investment of around $1.15 billion to set up a giga factory with a capacity of 19 GWh along with a battery pack assembly unit up to 5 GWh.

  • Timken is setting up a new manufacturing facility at Bharuch, Gujarat, to manufacture spherical roller bearings, cylindrical roller bearings, and other components.

  • Samsung plans to invest around $50 million to start manufacturing 5G and 4G radio equipment facilities in Tamil Nadu.

  • Lumax India plans to set up a greenfield plant in Chakan, Pune, to provide advanced lighting systems solutions to their OEM customers.

  • Collins Aerospace inaugurated its Global Engineering and Technology Center (GETC) and Collins India Operations Center in Bengaluru. The company is planning to invest around $200 million in engineering and manufacturing capabilities and hire over 2,000 highly skilled employees in the Indian aerospace and defense sector over the next five-year period.

Arun Mahajan
Director - Chennai Tech Center
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