Since the second week of May, the effects of India’s COVID-19 resurgence that has held the world’s attention have subsided. The lockdowns are easing, and local businesses are opening again. Most manufacturing that remained operational with reduced production during the second wave is now back on track. Despite the challenges, May’s manufacturing PMI was 50.8. The government just announced more incentives to accelerate the demand for electric vehicles, while Audi, Mahindra, Vedanta, and Hisense announced major investments for vehicles, TVs, and aluminum. For more industry intel and other tidbits, read on.
According to the Nomura India Business Resumption Index, activity picked up to 69.7 for the week ending June 6, compared to 62.9 a week earlier. The consistent increase reinforces the notion that the worst is over.
Despite a series of states enforcing lockdowns in May, the manufacturing PMI remained on the expansion side, clocking 50.8 for the month. For April, the Index of Industrial Production (IIP) increased 134% YOY due to the low base of 2020.
Last week, the government announced major revisions to the Faster Adoption and Manufacturing of Electric Vehicles (FAMEII) program. The subsidies for purchasing EVs have been increased by 50% and are based on the kWh of the vehicle. This includes hybrid vehicles but excludes electric buses. The incentive for purchasing electric two-wheelers has been increased to 40% of the price from 20% earlier.
According to a report from the Global Wind Energy Council and MEC Intelligence, India is expected to install an additional 20 GW of wind power by the year 2025, a growth rate of almost 50%. There is already a pipeline of projects totaling more than 10 GW on the books through 2023.
Audi India is planning to scale up their local manufacturing by 80%-85% through new investments.
Diversified engineering company Greaves Cotton plans to invest more than $13 million to expand the manufacturing capacity of electric two-wheelers at its plant in Ranipet, Tamil Nadu.
Mahindra & Mahindra, the automotive manufacturing arm of the Mahindra Group, will invest $2.3 billion over the next three-year period to launch a number of new products in the passenger vehicle segment.
Vedanta Limited, India’s largest aluminum producer, is planning to invest $1.5 billion to set up an aluminum manufacturing park in Odisha. The facility will benefit small and medium downstream companies which can set up production and draw hot metal from Vedanta’s aluminum smelter in Jharsuguda to make their end products.
Hisense, the Chinese electronics and appliance manufacturer who entered the Indian market last year, announced it will set up a new facility to produce 2 million TVs a year.