February 1, 2021
India’s manufacturing PMI ended the year at 56.4, a very healthy number. The unemployment rate has dropped to 6.5%, a further sign of recovery. Passenger vehicle sales in December rose by nearly 14% year-over-year. According to the latest U.N. report, globally, FDI inflow was down by 42% compared to 2019. However, in India, it increased by 13% as foreign investors took advantage of the growing economy, numerous business opportunities, and government incentives. For more industry intel and other tidbits, read on.
The India government’s Production Linked Incentive (PLI) scheme is proving to be a game-changer and is catalyzing the country’s pace of economic recovery. Under the PLI scheme, manufacturers receive incentives on incremental sales from products manufactured domestically. The scheme incentivizes foreign companies to set up manufacturing in India and encourages local companies to set up new production facilities or expand their existing ones. It is estimated that the PLI scheme is likely to add over $520 billion to the country’s GDP over the next five years. Below are the incentive outlays across several of the manufacturing sectors.
Tesla Inc. registered its Indian entity in Bangalore. Tesla plans to launch its Model 3 in June of this year.
New Jersey-based Triton Electric is planning to invest $1 billion in India. Recently, the company launched its electric sedan, Model N4, in India.
Japan-based Daicel Corp. is setting up an airbag inflator manufacturing plant in Chennai. The initial investment is likely to be around $35 million.
MG Motor India (SAIC Motor) plans to invest around $70 million to enhance production capacity at their Gujarat-based manufacturing plant.
Fiat Chrysler Automobiles (FCA) is planning to invest $400 million in India to launch a new line of SUVs.
Bajaj Auto is investing $95 million to setup a new manufacturing facility in Chakan, Pune.
The Ministry of Defense approved the procurement of 83 LCA-Tejas fighter jets, valued around $7 billion, from Hindustan Aeronautics Limited (HAL).
For more information, contact Arun Mahajan (AMahajan@AMTonline.org).