Sustaining Growth Momentum

Table 1. Indian Machine Tool Industry Trend

India’s economic trajectory remains promising, supported by prudent fiscal policies, accommodative monetary measures, and strong domestic demand. As global economic conditions evolve, India’s ability to navigate challenges while leveraging its strengths in diverse sectors will be pivotal in achieving long-term economic stability.

The fiscal year 2023-24 concluded with a robust real GDP growth of 8.2 percent, marking a significant acceleration from the previous year’s 7 percent. The fourth quarter alone saw a growth rate of 7.8 percent, underscoring sustained economic momentum driven by strong domestic demand and industrial activity. However, indicators such as the Index of Industrial Production (IIP) showed a slight moderation, with growth easing to 5.0 percent in April 2024, reflecting challenges in manufacturing output expansion. Both the Manufacturing and Services Purchasing Managers’ Indices (PMI) remained in expansionary territory, albeit at slower rates, with readings of 57.5 and 60.2, respectively, in May 2024.

On the fiscal front, the Government of India achieved significant milestones in fiscal management. Gross tax revenues grew by 13.5 percent in FY24, driven by strong performances in both direct and indirect taxes. Fiscal deficit as a percentage of GDP improved to 5.6 percent, demonstrating disciplined fiscal consolidation efforts. Externally, India’s trade dynamics showed strength amidst global uncertainties. Merchandise exports grew by 9.1 percent in May 2024, outpacing import growth, which eased to 7.7 percent. This contributed to a positive current account balance for the first time in 10 quarters, with the annual deficit narrowing to 0.7 percent of GDP in FY24 from 2.0 percent in FY23.

Toward a bright future

Indian Machine Tool industry production in FY24 is estimated to have increased by around 10 percent year-on-year, reaching about INR 13,571 crore (US$ 1.6 B). The industry's imports in FY24 saw a rise of 12 percent year-on-year, amounting to INR 15,352 crore (US$ 1.8 B). Machine tool exports during FY24 from India reported a 13 percent growth, amounting to INR 1,659 crore (US$ 200 M) and consumption is estimated to have increased by about 11 percent to reach INR 27,265 crore (US$ 3.3 B) in FY24.

According to the latest World Machine Tool Survey by Gardner Intelligence, India ranked 9th globally in production and 6th in consumption in 2023. For the second successive year, the Indian Machine Tool industry has achieved double-digit growth.

In FY24, China (29%), Japan (21%), and Germany (10%) emerged as the top countries for imports to India, contributing to 60 percent of the total machine tools imports. Presses (14%), Vertical Machining Centers (VMCs) (12%), and Turning Centers (11%) were the top machinery types imported, valued at INR 5,700 crore (US$ 688 M), constituting approximately 37 percent of total machine tool imports during the period.

In exports, Russia (28%), the USA (9%), and China (8%) emerged as the major destinations, collectively representing 45 percent of total machine tool exports in FY24, amounting to a total export value of INR 1,659 crore (US$ 200 M). Among the machinery types, Turning Centers (17%), VMCs (15%), and Presses (11%) stood out as the top three machinery types exported, with a combined value of INR 705 crore (US$ 85 M).

Source: Data & Policy Team, IMTMA

Source: IMTMA