India’s Economic Momentum: A Resilient Showcase of Growth

India’s economic landscape displayed resilience and promise in the third quarter of the fiscal year 2023-24, powered by robust performances across key sectors.

With a stellar double-digit growth rate of 11.6 percent in manufacturing and a solid 9.5 percent growth in construction, India’s real GDP surged by 8.4 percent in Q3 FY2023-24. This upward trajectory was bolstered by significant increases in both manufacturing and services PMI levels, soaring to 56.5 and 61.8 respectively in January 2024.

Alongside this encouraging trend, the Index of Industrial Production (IIP) witnessed a notable rise, reaching 3.8 percent growth in December 2023. Despite a slight moderation from the previous quarter, the average IIP growth stood at 5.8 percent, signaling sustained industrial momentum.

In its monetary policy review, the Reserve Bank of India (RBI) maintained the repo rate at 6.5 percent in February 2024, emphasizing a balanced approach to growth and inflation management. Positive trends were observed in both the consumer price index (CPI) and wholesale price index (WPI), with CPI inflation easing to 5.1 percent and WPI inflation dropping to 0.3 percent in January 2024.

The Indian machine tool industry also showcased notable growth in CY2023, with production increasing by approximately 9 percent year-on-year to reach INR 12,520 Cr (US$ 1.5 B). Imports surged by 16 percent, totaling INR 14,305 Cr (US$ 1.7 B), while exports reported an 8 percent growth, amounting to INR 1,543 Cr (US$ 185 M). Consumption estimates rose by 13 percent, reaching INR 25,283 Cr (US$ 3 B) in CY2023.

In CY2023, China, Japan, and Germany emerged as the top countries for imports, contributing to 60 percent of total machine tool imports. Presses, Vertical Machining Centers (VMC), and Turning Centers were among the top machinery types imported, constituting approximately 37 percent of total machine tool imports.

On the export front, Russia, USA, and China emerged as the top three destinations, accounting for 44 percent of total machine tool exports in CY2023. Turning Centers, VMCs, and Horizontal Machining Centers were the top machinery types exported, making up approximately 41 percent of total machine tool exports during the period.

Original source MMI