GROWING AMID GLOBAL UNCERTAINTIES

Amidst the backdrop of global uncertainties, India’s economic landscape demonstrates its agility to adapt and grow.

India’s Purchasing Managers’ Index (PMI) for June 2023 indicates that the Manufacturing and Services sectors remain strong at 57.8 and 58.5, respectively, maintaining a growth trend for a continuous two years.

In May 2023, there was a marginal increase in Net Foreign Portfolio Investment (FPI) inflows, reaching US$ 5.5 B, alongside strong Foreign Direct Investment (FDI) inflows. However, global crude prices dipped to an 18-month low of US$ 73.3 per barrel in June 2023, leading to concerns about a potential global growth slowdown.

In the face of the potential global impact of Chinese deflation pressure, India’s economic strength shines, concurrently offering growth prospects for other ASEAN countries. The Organization for Economic Co-operation and Development (OECD) projects global GDP growth to ease to 2.7 percent, and India’s growth to 6 percent in 2023. The International Monetary Fund (IMF) recently revised India’s growth projection to 6.1 percent for FY2024.

While the Indian economy sets a dynamic course, the Machine Tool industry resonates with growth. In FY2022-23, Indian Machine Tool production grew by 32 percent to INR 12,328 crore (US$ 1.5 B) and consumption increased by 55 percent to INR 24,536 crore (US$ 3 B). Production for the April to June quarter of 2023 increased by 9 percent year-on-year, reaching INR 2,182 crore (US$264 M). Moreover, orders booked during the same period witnessed an impressive growth of 14 percent, totaling INR 3,240 crore (US$ 392 M). The industry’s import landscape from April to June 2023 saw a rise of 2 percent year-on-year, amounting to INR 3,151 crore (US$384 M). China, Japan, and Germany emerged as the top countries for imports, contributing 58 percent of the total machine tool imports. Presses, Lathes, and Vertical Machining Centers (VMCs) were the top machinery imported valued at INR 1,119 crore (US$ 136 M) at about 36 percent of total machine tool imports.

Exports also demonstrate a positive trend, exhibiting a 3 percent growth for the April to June quarter of 2023, amounting to INR 303 crore (US$37 M). Russia, China, and the USA emerged as the top export destinations, accounting for 33 percent of total machine tool exports. Lathes and Machining Centers were the top machinery exported valued at INR 118 Cr (US$ 14 M) at about 39 percent of total machine tool exports. The Indian machine tool market continues to expand, with consumption reaching INR 5,030 crore (US$ 608 M) from April to June 2023.

As we delve into July 2023, the Machine Tool sector’s imports grew by 5.5 percent year-on-year, reaching INR 1,124 crore (US$137 M), with China, Japan, and Taiwan dominating the landscape. On the other hand, exports faced a 35 percent decline, totaling INR 108 crore (US$13 M), with China, Japan, and Taiwan remaining key export destinations.

India’s economic growth demonstrates the nation’s ability to navigate complex global uncertainties. As demand rises from user industries and emerging sectors, coupled with ongoing infrastructure and mobility advancements, the Machine Tool industry is poised for growth.

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