India’s manufacturing PMI ended 2023 at 54.9, a strong finish to a great year. From July to September 2023, India’s GDP grew 7.6%, driven by a strong rebound in the manufacturing sector, the continuation of the government’s capital expenditure drive, and a gradual acceleration of private investment. India’s investment landscape is expected to continue to be a key driver of economic growth.
According to the S&P Global Mobility Forecast, India was the fastest-growing automobile market in 2023 among the world’s 10 largest, compared to 2019. India remains the third-largest light vehicle market (including cars and light utility vehicles less than six tons), behind China and the United States. The sales of vehicles in 2023 saw a growth of 36% over 2019 and 11% over 2022. According to the Federation of Automobile Dealers Association (FADA), retail sales amounted to 23.86 million units in 2023.
The Automotive Component Manufacturers Association (ACMA) reported that the automotive component industry is planning to invest between $6 billion to $7 billion over the next five years on capacity expansion and technology upgrades, with demand expected to remain robust over the period. The component companies invested around $4 billion over the last five years. In the first half of the current fiscal year, which ran from April to September 2023, the industry reported 12.6% YOY revenue growth. The sales turnover for the period stood at $35.1 billion.
According to a recent KPMG survey report, over 63% of Indian enterprises will invest in artificial intelligence and machine learning to automate their businesses in 2024. This would amount to an almost 85% increase in investments over 2023.
Exports of electronic goods rose by 26% from April to November 2023 YOY. The increase has been propelled by mobile device exports under the Production Linked Incentive Scheme and has pushed electronics up from sixth to fifth position in export categories.
During the 10th annual Vibrant Gujarat Summit, which ended Jan. 12, over $300 billion worth of investment project MOUs were signed. These investments will span various sectors such as power, oil and gas, chemicals and petrochemicals, port infrastructure, engineering, automotive, renewables, green hydrogen, semiconductors, and e-mobility.
Also this month, the Tamil Nadu Investors Global Meet attracted investment projects worth over $85 billion across similar sectors, as well as in electronics manufacturing, footwear, and others.
A few recently announced projects and investments of note:
Tata Group is planning to set up a new iPhone assembly plant in Hosur, Tamil Nadu. The facility will likely have 20 assembly lines and employ over 50,000 workers within two years.
Tata Group is planning to enter semiconductor manufacturing by setting up a facility in Dholera, Gujarat.
Tata Power is planning to invest around $8 billion over the next five to seven years to establish 10 gigawatts of solar and wind units in Tamil Nadu. The company is additionally planning to establish a greenfield 4.3 GW solar cell and module manufacturing plant in Tirunelveli.
Vietnamese EV manufacturer VinFast is investing around $2 billion to set up an EV plant in Thoothukudi in southern Tamil Nadu. The plant will have a capacity of up to 150,000 vehicles per year.
U.S.-based Corning Inc. is planning to invest around $125 million to set up a Gorilla Glass manufacturing facility in Tamil Nadu.
India’s Maruti Suzuki is planning to invest around $4.2 billion to set up their second manufacturing plant in Gujarat with an annual capacity of over 1 million units.
India’s Reliance Group is setting up a carbon fiber facility at Hazira, Gujarat.
India’s Sundaram Fasteners is investing around $175 million over the next five-year period to augment their existing production capacity, particularly focusing on components for electric vehicles.
India’s Royal Enfield (motorcycles) is planning to invest $500 million over the next seven to eight years to develop new products and build capacity.
French automotive component manufacturer Valeo is planning to invest around $125 million to augment its production facilities in Tamil Nadu.
For more information, please contact Arun Mahajan at AMahajan@AMTonline.org.
