India’s manufacturing PMI remained robust in June, clocking 57.8 against 58.7 in May. The services PMI stood at 58.5 in June against 61.2 from the previous month. Industrial production rose 5.2% YOY in May against 4.2% in April, and manufacturing production rose 5.7% against 4.9% in the same time.
According to the latest economic outlook report released by S&P Global Ratings, India is projected to grow at an average rate of 6.7% for the next three years, retaining the title of fastest-growing major economy. India will grow 6% in the current fiscal year and further bounce back to 6.9% in 2024 and 2025.
In a major boost to Indian drone manufacturing, the federal government eased the rules for the export of drones and unmanned aerial vehicles meant for civilian end use. The goal is to make India a global manufacturing hub for drones by 2030. This would encourage a lot of startups to scale up and look at global markets.
India’s defense exports are growing steadily. It has grown 23-fold in the last nine years and is presently valued at over $2 billion. The government has implemented numerous policy initiatives and introduced reforms to stimulate defense exports. The paradigm shift in the defense landscape has transformed the country from primarily being an importer of defense equipment to emerging as an exporter of significant platforms. There are presently around 100 manufacturing companies engaged in defense products and which export to more than 85 countries.
According to a report by Primus Partners, in the last fiscal year, the Indian auto industry produced a staggering 27 million vehicles, valued at around $108 billion, across all segments and types. The passenger vehicle segment accounted for $60.92 billion, or 57% of the total value. Commercial vehicles were about 1 million, worth $20.71 billion, or around 19%. The remaining 20 million were two-wheelers, worth around $21.93 billion, amounting to 21% of the total value.
The latest domestic sales data on passenger vehicles, three-wheelers, and two-wheelers released by the Society of Indian Automobile Manufacturers indicates 327,487 passenger vehicle units were sold in June, an increase of 2% YOY. Three-wheeler sales doubled to 53,019 units. Motorcycle sales increased 7% to 908,954 units.
A few recently announced projects and investment news items are listed below:
Carl Zeiss is investing around $280 million to build a spectacle lens production facility in Bengaluru. This will be their largest “vision factory” in the world, with a capacity of 260,000 lenses per day, about six times what the firm produces today.
Harley Davidson is launching its most affordable bike, the HDX440, in partnership with Hero MotoCorp. Harley intends not only to manufacture and sell it domestically but also to export it along with higher-end bikes from their India setup.
Godrej Aerospace (GA) is in talks with Airbus and Boeing to manufacture aircraft parts and to become part of their supply chain. This is against the backdrop of over 1,000 new aircraft that have been ordered by Tata and Indigo. GA already exports some key components to engine makers GE and Rolls-Royce. The company is investing in setting up a new facility in Khalapur, Maharashtra, for advanced manufacturing, assembly, and integration facilities.
Foxconn moved out of its $19.5 billion chipmaking JV that it formed with Vedanta Group. However, they have mentioned that they are committed to establishing a robust semiconductor manufacturing ecosystem and are in the process of availing themselves of the incentives that India is offering under its semiconductor manufacturing policy.
Appliance and television maker Haier is investing about $125 million for capacity expansion at its Noida-based plant over the next three years. This includes setting up a plant for injection molding and sheet metal, which are major input materials used in refrigerators and washing machines.
For more information, please contact Arun Mahajan at AMahajan@AMTonline.org.