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India’s industrial sector continues to outperform those of the other major world economies. As per a recent International Monetary Fund report, India is set to contribute 18% to global growth - up from the current 16%. The most recent quarterly survey conducted by the Federation of Indian Chambers of Commerce and Industry highlighted robust growth in India’s manufacturing sector in the second quarter of the 2023-24 fiscal year and also suggested this momentum could extend into upcoming quarters.

It was no surprise that India’s manufacturing PMI for October registered its 28th consecutive month of expansion as compared to 14 consecutive months of contraction in the global PMI. 

Industries mounting strong performances include electronics, white goods, cement, automotive and machine tools whereas capital goods, construction machinery, chemicals, textiles, metals and paper recorded more modest growth. 

Foreign direct equity investments in India dropped 24% to US$ 20.5 billion in the first half of the 2023-24 fiscal year as compared to the previous year. The decline is attributed to global economic uncertainties and elevated US interest rates.

India remains a positive force in the global economy, with key factors in its growth including a sizeable labour market, supportive policies and a growing digital economy. 

Focusing on copper, global consumption has remained firm this year as Chinese demand for green energy-related investments has more than offset the slowdown in demand from the traditional power and construction sectors. However, a deficit of copper ore is emerging as a big story.

Copper consumption in India will continue to grow at a compound annual growth rate (CAGR) of roughly 1.6 to 2 times that of GDP growth. In other words, copper growth is expected to continue at a CAGR of 8 to 10% for the next few years, driven largely by new demand from the power and construction sectors. Green energy investments are gradually shaping up to be new drivers of growth but are still at a nascent stage.

Turning to the aluminium alloy ingots market, India’s automotive sales grew by 20% and registered record festive sales in November.

Meanwhile, India’s aluminium FRP demand weakened in quarter two owing to unseasonal rainfall across key regions of the country. The beverage and consumer durables sectors were impacted by a milder summer and heavy rainfall. Rising inflation is posing a downside risk to the demand outlook. Major beverage company PepsiCo India has reported that beverage sales fell 27.6% year on year in the April-June quarter.

In other news, Indian metal major Hindalco has started production of can body stock at its Hirakund plant.

Anirudha Agrawal

Manaksia Aluminium CO LTD. (IND), Guest contributor


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