Due to weakened demand, India's manufacturing growth slowed to a three-month low in August. The manufacturing PMI dropped to 57.5 from July's 58.1. GDP growth for the quarter from April to June stood at 6.7%, down from over 7% in the previous quarter. The decrease in GDP numbers is attributed to reduced government spending due to the country鈥檚 recently concluded elections. According to the World Bank and various rating agencies, India's GDP is projected to grow overall by 7%-7.2% in fiscal year 2024-25. The industrial production index for July rose to 4.8%, slightly higher than June's 4.7%.
According to a recent Nuvama report, the two-wheeler industry in India is projected to grow by 8% year over year from January to July 2024, while the tractor industry is expected to grow by 4% year over year for the same period. The passenger vehicle segment is likely to experience a slight decline in sales of around 3% year over year, and the commercial vehicle segment is also likely to experience a decline in sales of around 4% year over year.
The latest ICRA report projects increased component localization in India's construction equipment sector, creating an annual business opportunity of around $3 billion by FY 2030. The report forecasts that the localization level will increase from the current 50% to 70% over the next five to seven years. Currently, India imports nearly 50% of its components' requirements from suppliers in China, Japan, South Korea, and other countries. Imported components include parts such as hydraulics, undercarriages, electronic control units and sensors, high-tonnage machinery, and certain grades of steel alloy. India is presently the third-largest global market by volume. According to the latest ICEMA report, the industry saw a 5% year-over-year increase in sales during the April to June quarter, reaching 28,902 units compared to 27,577 units last year. Rising sales drove growth in earthmoving, road construction, and concrete equipment by 5%, 9%, and 11%, respectively.
Apple iPhone exports from India reached $5 billion in the first five months of FY 2024-25, marking a significant 54% increase from $3.2 billion during the same period last year. Apple collaborates with three vendors 鈥� Foxconn, Pegatron, and Wistron (now Tata Electronics) 鈥� under the smartphone production-linked incentive scheme, with a collective export commitment of $8.9 billion for the current fiscal year.
A few recently announced projects and investment news items are listed below for your reference.
Tata Group is putting up a $3 billion semiconductor assembly and test facility in Assam, which is set to commence operations next year. The new facility, located in Jagiroad, is expected to package around 15 billion chips annually for global customers.
Ford Motors plans to reopen its Chennai plant for global export operations.
ZF Wind Power Coimbatore is investing around $56 million to boost the production capacity of its Coimbatore facility from 9 GW to 12 GW. The expansion will increase ZF鈥檚 global wind gearbox production capacity to 25 GW. To date, ZF has invested around $260 million in its Coimbatore operations.
U.S.-based Monarch Tractors is in discussions with Telangana to set up a manufacturing unit for electric tractors in the state. The company established an R&D facility in Hyderabad in 2023.
Mahindra and Mahindra are in discussions with Kerala to set up an EV manufacturing unit in the state.
U.S.-based Ohmium International plans to set up a manufacturing facility in Tamil Nadu. Ohmium designs and manufactures modular, scalable proton exchange membrane electrolyzers that enable green hydrogen production.
Japanese air conditioning manufacturer Daikin has signed an MOU to acquire an additional 33 acres of land to build a new plant near its existing plant in Sri City, Andhra Pradesh.
Caterpillar is investing to enhance its production capacities at the company鈥檚 existing facilities in Tiruvallur and Hosur.
For more information, please contact Arun Mahajan at AMahajan@AMTonline.org.
