In July, India's manufacturing sector saw strong growth despite high-cost pressures. The manufacturing PMI stood at 58.1, slightly down from June's 58.3. New orders and output showed healthy growth, with exports increasing at the second-fastest pace in 13 years. The manufacturing PMI averaged 52.89 from 2012 to 2024.
According to S&P Global Mobility, India is expected to lead global growth in light vehicle production, with a projected CAGR of 4.6% from 2023 to 2033, surpassing the previous decade's 4.1%. India is currently the fourth-largest light vehicle producer, manufacturing 5.4 million vehicles annually.
Due to steady vehicle production, a strong aftermarket, and export growth, India鈥檚 auto component industry reached $74.1 billion in fiscal year 2023-24, marking a 9.8% growth over the previous fiscal year. Component supply to domestic OEMs grew by 8.9%, while exports grew by 5.5% to $21.2 billion.
According to the latest Crisil report, India is expected to add about 25 GW of wind energy capacity between 2025 and 2028, requiring a capital expenditure of around $25 billion. This follows a slowdown in India's focus on wind energy, with annual capacity additions dropping to 1.7 GW from 2018 to 2023, down from approximately 3 GW annually from 2014 to 2018.
The government plans to allocate $4.5 billion in a production-linked incentive (PLI) scheme to position India as a global hub for electronic subassemblies. The scheme will cover a range of subassemblies, including camera modules, display assemblies, mechanical parts, and battery chargers.
India's defense production in fiscal year 2023-24 reached a record high of $15.2 billion, reflecting a growth of 16.7% from the previous year. This demonstrates the impact of policy reforms and initiatives introduced over the past decade to promote self-reliance in defense manufacturing.
A few recently announced projects and investment news items are listed below for your reference.
Toyota Kirloskar Motors is meeting the increasing demand for cars in India by establishing their 3rd manufacturing unit in Aurangabad, Maharashtra, with an investment of over $2.5 billion. The company already operates two manufacturing units located near Bangalore in Karnataka.
Tata Motors is set to lay the foundation stone for a $1.1 billion Jaguar Land Rover (JLR) EV project in the Ranipet district of Tamil Nadu. The plant, which will manufacture and export JLR cars, is scheduled to be ready by early 2026.
Farm and construction equipment manufacturer Escorts Kubota Ltd. plans to invest $550 million to set up a greenfield tractor manufacturing plant in Rajasthan. The plant will enable the company to double its current capacity to around 340,000 units annually. The investments will be made over a three to four-year period and will also involve setting up new engine and construction equipment lines in phases.
Foxconn plans to invest in establishing an assembly line for Apple iPads at its Tamil Nadu facility. Currently, the company assembles the latest range of iPhones at the facility.
Tata Power plans to invest around $2.5 billion to accelerate its renewable energy portfolio and expand its transmission and distribution business. The company aims to achieve a 15-GW clean energy portfolio within five years, up from the current 9 GW. Additionally, the company plans to establish a new 4.3-GW solar cell and module manufacturing plant in Tamil Nadu.
The Japanese automaker Nissan is ramping up its business in India and plans to launch five new models over the next 30 months. Currently, Nissan offers only one model in India and aims to introduce two mid-size SUVs, an electric SUV, and a new version of their existing compact SUV, the Magnite. The premium SUV X-Trail is currently imported into India as a completely built-up unit (CBU).
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