RESILIENT AND ACCELERATED

India’s economy demonstrates remarkable resilience and rapid growth, positioning the nation for continued success in the global landscape.

India’s economic performance in the fourth quarter of FY23 exceeded expectations, with real GDP and GVA growth improving to 6.1 percent and 6.5 percent, respectively. The annual real GDP growth for FY23 reached 7.2 percent, surpassing the earlier projection of 7 percent and indicating a positive momentum in the country’s economic landscape. The Manufacturing PMI reached a 31-month high of 58.7, while the Services PMI was at its second-highest level in close to 13 years at 61.2 in May 2023. These indicators demonstrate the expanding scope of economic activities and job creation in the country.

The recovery in manufacturing output led to a 4.2 percent growth in the Index of Industrial Production in April 2023, compared to 1.7 percent in March 2023. This rebound in industrial production showcases the strength of India’s Manufacturing sector. The Reserve Bank of India (RBI) retained the repo rate at 6.5 percent in its June 2023 monetary policy review, supporting investment and consumer spending.

Indian machine tool industry outlook: A beacon of hope amid global challenges

The latest World Machine Tool Survey report by Gardner Intelligence, released in June 2023, reveals a global decline in machine tool consumption and production. However, amidst this backdrop, the Indian Machine Tool industry has showcased promising growth. India secured the 9^th rank globally in production, with a 5.5 percent year-on-year increase, reaching US$1.4 billion in 2022. In terms of consumption, India ranks 7^th globally, experiencing a record-high growth of 30 percent on year-on-year basis, reaching US$2.8 billion in 2022.

India’s performance in machine tool imports and exports further demonstrates its strength in the global market. Import-wise, India ranks 6^th globally, with imports valued at US$1.6 billion in 2022, experiencing a substantial year-on-year growth of 71 percent. Impressively, Indian machine tool exports recorded a year-on-year growth of 78 percent, reaching around US$182 million.

On the export front, total machine tool exports for April and May in FY2023-24 were estimated at `111 crore (US$14 million) and `99 crore (US$12 million), respectively. While April exports showed a significant 53% growth, May exports experienced a 5% year-on-year decline.

Moving forward to the current fiscal year, machine tool imports in April and May of FY2023-24 were estimated at `1,002 crore (US$122 million) and `1,137 crore (US$122 million) respectively. While April imports declined by 8 percent, May imports showed a notable improvement with a 44 percent year-on-year growth. China, Japan, and Germany were the top three countries in terms of machine tool imports to India, accounting for 56 percent of total imports in April and May 2023. Presses, Vertical Machining Centers, and Lathes were the top three machinery types imported, comprising 36 percent of the total imports.

Russia, US, and China emerged as the top three destinations for Indian machine tool exports, accounting for 30 percent of total exports in April and May 2023. Horizontal Machining Centers, Vertical Machining Centers, and Lathes were the top three machinery types exported, representing 34 percent of the total exports.

Analysis of the economic trends reinforces India’s position as a competitive player in the international market. The country’s Machine Tool industry is poised to make significant strides in the years to come.