India’s manufacturing activity experienced its fastest growth in eight months in March, reaching a PMI of 58.1 from February’s 56.3. Both new orders and output increased at their quickest rates since July 2024.
According to the latest IMF data, India’s GDP has doubled over the past decade. The country’s GDP was $2.1 trillion in 2015 and is projected to reach $4.27 trillion by the end of 2025. This year's real GDP growth rate stands at 6.5%, reflecting a strong and stable economic expansion. India’s industrial production grew by 5% year over year in January 2025, following a revised 3.5% year-over-year expansion in December 2024.
Currently, India’s automotive components sector contributes 2.3% to the country’s GDP. Exports in this sector are growing rapidly, reaching $21 billion at the end of 2024, which is expected to rise to $30 billion by 2026 and reach $100 billion by 2030. Data shows that approximately 25% of the produced components are exported annually, with Europe leading at $6.89 billion, followed by North America at $6.19 billion and Asia at $5.15 billion. The sector is set to attract around $7 billion in investments to boost the localization of automatic transmissions and electric motors.
While India’s aerospace industry shows significant potential and growth on the military side, the civilian side also shows promise. Approximately 2,000 new aircraft are on order from Indian airline companies, primarily from Airbus and Boeing. As a result, both companies are rapidly developing their supply chain bases in India. To meet stipulated offset obligations, sourcing goes beyond just information technology to also involve the development of engineering capabilities within the country and the manufacture of various engine and chassis parts, along with assembling, in partnership with Indian firms.
Thanks to the Make in India initiative, defense production in India reached a record $150 billion in 2024. Exports totaled $2.5 billion during this period, an expansion of 30 times over the last decade. Local manufacturing includes the development of advanced military platforms, such as artillery guns, tanks, light combat aircraft, and helicopters. Recently, the government signed contracts with Bharat Forge and Tata Advanced Systems worth over $1 billion to procure 155-mm/52-caliber advanced towed artillery guns and high mobility vehicle 6x6 gun towing vehicles.
Hindustan Aeronautics Limited (HAL) has invited four Indian private firms to partner through a joint venture to manufacture India’s fifth-generation fighter aircraft, the Advanced Medium Combat Aircraft. The invited companies are Tata Advanced Systems, Bharat Forge, Larsen & Toubro, and VEM Technologies. HAL will hold a 50% stake in the joint venture, with each of the four partners holding 12.5%.
Indian Railways plans to invest approximately $200 billion by 2031 in various infrastructure projects. These projects include establishing dedicated freight corridors, high-speed railways, upgrading stations, and electrification efforts.
A few recently announced projects and investment news items are listed below.
BYD plans to invest around $10 billion to set up an electric vehicle manufacturing plant near Hyderabad, Telangana.
Maruti Suzuki is investing around $875 million to set up its third manufacturing plant in Kharkoda, Harayana. The plant will add 250,000 units to its annual production capacity, bringing the facility's total capacity to 750,000 units per year by 2029.
Aequs and Magellan Aerospace have signed an MOU to set up a sand-casting facility in the Belagavi Aerospace Cluster in Karnataka to accommodate the aerospace sector's growing manufacturing needs.
Bharat Earth Movers Ltd., which is involved in construction and mining, rails and metro, and defense and aerospace verticals, is setting up a manufacturing plant for advanced mining equipment in Chhattisgarh. The plant will focus on producing high-performance dump trucks, water sprinklers, motor graders, and more.
Hero Motors and Germany’s Schmiede Technik Plettenberg have formed a joint venture to establish a new manufacturing facility at Hero Industrial Park in Ludhiana, Punjab. The facility will produce forged powertrain components for automotive applications.
Bharat Forge subsidiary Kalyani Strategic Systems Ltd. has formed a joint venture with Spain’s Duma Engineering Group S.L. The JV will develop technology, product platforms, and solutions for the defense sector of India, Europe, and other export markets. KSSL will hold a 90% stake, while Duma will hold a 10% stake.
JBI Aerospace and Germany-based Vik-Composite GmbH have partnered to construct a facility in India to cater to composite needs in the aerospace, aviation, wind energy, space, and defense sectors.
For more information, please contact Arun Mahajan at AMahajan@AMTonline.org.
