India’s manufacturing PMI climbed to 56.5 in January 2024 from December’s 54.9, recording the strongest growth since September 2023. The services PMI clocked in at 61.8 in January 2024, up from 59 in December. Business sentiment in the last quarter of 2023 increased to 135.4 points from 132.5 points in the third quarter.
The Indian auto industry posted its highest-ever monthly domestic passenger vehicle sales in January 2024 at 394,571 units, growing 13.9% year over year on the back of rising demand for SUVs.
Airbus and Tata Group have inked a deal to co-manufacture H125 single-engine helicopters for commercial use at their assembly line in Vadodara, Gujarat. Additionally, they would collaborate on producing a minimum of 40 units of the C-295 transport aircraft in India, with Tata Advanced Systems overseeing the assembly in Gujarat.
Hindustan Aeronautics Ltd. (HAL) and Safran Helicopter Engines formed a joint venture for the development of the Indian Multi-Role Helicopter (IMRH) engine. HAL will take a direct role in designing, developing, and producing essential engine components at their facility under the technical guidance of Safran.
India is working to raise its share of natural gas in its primary energy mix from 6% to 15% over the next six years to bolster the nation’s energy infrastructure. Investments of $67 billion are being planned in the Indian gas sector to achieve this target. India will be a key producer and exporter of hydrogen. Plans have also been made to expand the nation’s refining capacity by 75% by 2030.
In its recently announced interim budget for fiscal year 2024-2025, the Indian government has significantly bolstered the allocation for the PLI (production-linked incentives) scheme, totaling around $1.8 billion, which will be spread across an array of manufacturing sectors, including mobile phones, IT hardware, pharmaceuticals, food processing, telecom hardware, and auto components. The earlier planned disbursement was around $1.3 billion for this fiscal year.
Electronics manufacturing is steadily gaining momentum in India, which is presently the world’s second-largest producer of mobile phones. Last year, Apple sourced 13% of its total production from the Foxconn plant in Tamil Nadu. Apple intends to double the number this year, and Foxconn and Tata Group are carrying out massive investments to expand their existing capacities.
India’s infrastructure sector will attract a combined investment of $1.72 trillion both from the government as well as private sector companies between 2024 and 2030. The funds will focus on road and highway construction, railways, ports, power, emerging sectors like electric vehicles (EVs) and renewable energy, and more. The government has allocated a capex expenditure of $134 billion in their interim budget for the present fiscal year, which constitutes 3.4% of the GDP, an 11% increase over the previous fiscal year.
India’s JSW group signed an MOU with the Odisha government to establish integrated EV and EV battery manufacturing projects in Cuttack and Paradip. These projects will include an investment of around $5 billion. Of that investment, $3 billion dollars will be made in Cuttack for an EV and battery complex. The remaining $2 billion go to setting up an EV component manufacturing plant in Paradip. These projects would create a total of around 11,000 new jobs in the state.
A few recently announced projects and investment news items are listed below for your reference.
Israel-based chip manufacturer Tower Semiconductor has submitted its proposal to set up a chip fabrication plant in India worth $8 billion. This would be the first semiconductor company with a real fabrication pedigree to join India’s $10-billion chip-manufacturing scheme. The company is looking to manufacture 65 nanometer and 40 nanometer chips in India, which may be used in several sectors, including automotive and wearable electronics.
Adani Group is developing the largest single-location copper manufacturing facility in the world in Mundra, Gujarat, with an investment of $1.2 billion.
Rolls-Royce PLC has forged a seven-year partnership with Azad Engineering in Hyderabad for the production and supply of intricate components for its defense aircraft engines.
With an investment of $135 million, Alstom has initiated production of 108 driverless advanced metro coaches for Chennai Metro Phase II at its facility in Sri City.
JSW Steel is setting up a JV with Japan-based JFE Steel Corp. and will invest $750 million to set up a plant in Bellary, Karnataka. Production is likely to commence in 2027.
Lumax Cornaglia Auto Technologies will inaugurate a new manufacturing plant in Pune to meet the Indian automotive industry’s need for emission equipment. The plant will produce air filtration systems, snorkels, and blow-molded products like AdBlue tanks and degassing tanks. It will also use 3D blow-molding technology to manufacture plastic fuel tanks for commercial vehicles.
Force Motors is investing $250 million over the next two to three years to make significant strides in their EV plans.
Wistron will invest around $200 million to set up a laptop manufacturing plant near Bengaluru.
CNH is investing around $50 million in the farm machinery sector in India to focus on its tractor business. It has a tractor manufacturing plant in Noida, Uttar Pradesh, with an annual capacity of 60,000 units. Additionally, it has another plant in Pune, Maharashtra, dedicated to harvesters.
For more information, please contact Arun Mahajan at AMahajan@AMTonline.org.
