OVERVIEW OF INDIA  | FASTENER EURASIA MAGAZINE
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OVERVIEW OF INDIA 

ECONOMY
India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships.

MARKET SIZE
India’s real gross domestic product (GDP) at current prices stood at Rs. 135.13 lakh crore (US$ 1.82 trillion) in FY21, as per the provisional estimates of annual national income for 2020-21.
India is the fourth-largest unicorn base in the world with over 21 unicorns collectively valued at US$ 73.2 billion, as per the Hurun Global Unicorn List. By 2025, India is expected to have ~100 unicorns by 2025 and will create ~1.1 million direct jobs according to the Nasscom-Zinnov report ‘Indian Tech Start-up’.

India needs to increase its rate of employment growth and create 90 million non-farm jobs between 2023 and 2030's, for productivity and economic growth according to McKinsey Global Institute. Net employment rate needs to grow by 1.5% per year from 2023 to 2030 to achieve 8-8.5% GDP growth between 2023 and 2030.
According to data from the RBI, as of the week ended on June 04, 2021, the foreign exchange reserves in India increased by US$ 6.842 billion to reach US$ 605 billion.

AUTOMOTIVE
India is the world's 4th largest vehicle market.
India is expected to be the world's third-largest automotive market in terms of volume by 2026. The $118 bn Automobile industry is expected to reach $300 bn by 2026.

The Automobile industry of India, currently manufactures 26 mn vehicles including Passenger Vehicles, Commercial Vehicles, Three Wheelers, Two Wheelers, and quadricycles in April-March 2020, of which 4.7 mn are exported. 
India holds a strong position in the international heavy vehicles arena as it is the largest tractor manufacturer, second-largest bus manufacturer, and third largest heavy trucks manufacturer in the world. 

In the Automobile market in India, Two-wheelers and passenger cars accounted for 80.8% and 12.9% market share, respectively, accounting for a combined sale of over 20.1 mn vehicles in FY20. Passenger car sales are dominated by small and midsized cars.

Overall, Indian automobile export reached 4.77 million vehicles in FY20, implying a CAGR of 6.94% between FY16-FY20. Two-wheelers constituted 73.9% of the total vehicles exported, followed by passenger vehicles at 14.2%, three-wheelers at 10.5%, and commercial vehicles at 1.3%.

The EV market is expected to grow at CAGR of 44% between 2020-2027 and is expected to hit 6.34 million-unit annual sales by 2027. The EV industry will create five crore direct and indirect jobs by 2030. 
A market size of $50 bn for the financing of EVs in 2030 has been identified—about 80% of the current size of India’s retail vehicle finance industry, worth $60 bn today.
India's passenger vehicle industry is expected to post a growth of 22% - 25% in FY22.

AUTO COMPONENTS
The growing presence of global automobile Original Equipment Manufacturers (OEMs) in the Indian manufacturing landscape has significantly increased the localization of their components in the country. India has become the preferred designing and manufacturing base for most global auto OEMs for local sourcing and exports.

The $49 bn (FY20)  Auto Components industry in India is expected to grow to $200 bn by 2026.
Auto Components industry exports, which is currently valued at $14.5bn in FY20, is expected to grow at an annual rate of 23.9% to reach $80 bn by 2026. USA, Germany, UK, Thailand and Italy are the top destinations for exports.

Aftermarket segment which includes tyre, battery, brake parts, is expected to reach $32 bn by 2026 from $9.8 bn currently.

The overall industry which accounts for 2.3% of India's GDP currently, is set to become the 3rd largest in the world by 2025.


CONSTRUCTION
The Construction industry in India consists of the Real estate as well as the Urban development segment. The Real estate segment covers residential, office, retail, hotels and leisure parks, among others. While Urban development segment broadly consists of sub-segments such as Water supply, Sanitation, Urban transport, Schools, and Healthcare. Indian real estate attracted $5 billion institutional investments in 2020.

•    By 2025, Construction market in India is expected to emerge as the third largest globally
•    By 2025, Construction output is expected to grow on average by 7.1% each year
•    Construction equipment industry revenue stood at $ 6.5 Bn in 2020
•    The Construction Industry is expected to reach $1.4 Tn by 2025
•    Construction Industry received the 2nd highest FDI in the period 2000-2020

The Construction Industry works across 250 sub-sectors with linkages across sectors. Broadly, it can be divided into real estate and infrastructure construction.
The Real Estate Industry in India is expected to reach $1 Tn by 2030 and contributes to 13% of GDP
Under NIP, India has an investment budget of $1.4 Tn on infrastructure - 24% on renewable energy, 19% on roads & highways, 16% on urban infrastructure, and 13% on railways.
Under the Smart Cities Mission till June 2021, 2,734 projects have been completed of the total 5,956 projects.

DEFENCE INDUSTRY
India accounts for 3.7% of the global military spending, making it the third highest military spender in the world. The defence expenditure constituted 2.9% of India’s total GDP with approximately $72.9 billion spent on defence in 2020. Under the Field Artillery Rationalization Plan - 1,580 towed guns, 100 tracked guns, 814 Mounted Gun System will be required in India.

With the growing demand in the defence sector the government has identified it as one of the core areas to boost ‘Atma Nirbhar Bharat or Self-Reliant India. The Government has also spelt out its vision of achieving a turnover of Rs US$ 25Bn including export of US$ 5 Bn in Aerospace and Defence goods and services by 2025.

To support defence modernisation, in the budget 2021-22 the defence capital outlay has been increased by 18.75% from the preceding year. This is the highest ever increment in the last 15 years.
To cater to the growing demand the government has called for an increased participation of the private sector in defence manufacturing. The opening up of the industry also paves the way for foreign original equipment manufacturers to enter strategic partnerships with Indian companies.

ELECTRONIC SYSTEMS
India is one of the largest consumer electronics markets in Asia Pacific Region
The world’s fastest-growing industry, Electronics System Design and Manufacturing (ESDM) continues to transform lives, businesses, and economies across the globe. The global electronics market is estimated to be over $2 tn. India’s share in global electronics manufacturing has grown from 1.3% in 2012 to 3.6% in 2019.

Technology transitions such as the rollout of 5G networks and IoT are driving the accelerated adoption of electronics products. Initiatives such as ‘Digital India’ and ‘Smart City’ projects have raised the demand for IoT in the market and will undoubtedly usher in a new era for electronic products.

•    India is expected to have a digital economy of $1 tn by 2025
•    One of the largest electronics markets in the world anticipated reaching $400 bn by 2025
•    Indian Electronics Manufacturing Service (EMS) Industry is expected to grow 6.5x from $23.5 bn to reach $152 bn by 2025
The electronics market valued at $118 bn in 2019-20 is segmented as Mobile Phones (24%), Consumer Electronics (22%), Strategic Electronics (12%), Computer Hardware (7%), LEDs (2%) and Industrial Electronics (34%) comprising of Auto, Medical and other industrial electronic products.

METALS & MINING
India is the 2nd largest crude steel producer in the world, generating an output of 99.6 MT in 2020. 
•    Domestic consumption of Total Finished Steel (alloy + non-alloy) was at 88.53 MT in 2020 as against 83.64 MT in 2016.
•    Over 2030-31, crude steel demand/production forecasted to reach 255 MT
•    Per capita finished steel consumption is expected to rise to 160 kg by 2030-31 (from 74.7 kg in 2019-20)

The Metals and Mining sector in India is expected to witness a major reform in the next few years, owing to reforms such as Make in India Campaign, Smart Cities, Rural Electrification, and a focus on building renewable energy projects under the National Electricity Policy as well as the rise in infrastructure development.

The production level of important minerals in March 2021 were: Coal 960 lakh tonnes, Lignite 52 lakh tonnes, Bauxite 2,103 thousand tonnes, Chromite 601 thousand tonnes, Copper conc 11 thousand tonnes, Iron ore 227 lakh tonnes, Lead conc 41 thousand tonnes, Manganese ore 331 thousand tonnes, Zinc conc 164 thousand tonnes, Limestone 391 lakh tonnes, Phosphorite 124 thousand tonnes, Magnesite 12 thousand tonnes, Gold 148 kg, and Diamond 34 carat.

The production of important minerals showing positive growth during March 2021 over March 2020 included Manganese Ore (80.1%), Lead conc. (74.9%), Phosphorite (57.0%), Copper conc. (50.2%), Chromite (45.8%), Limestone (45.6%), Magnesite (44.9%), Zinc conc. (43.2%), Bauxite (33.4%),  Lignite (25.3%), Iron ore (13.7%), and Coal (0.2%)

WHITE GOODS INDUSTRY
The white goods industry consists of air conditioners, refrigerators, washing machines and dryers, dishwashers, and LED Lights.
The Indian appliance and consumer electronics market is worth $10.93 bn. Domestic manufacturing in the Indian applicable and consumer electronics industry contributed $4.61 bn.
Global appliance and consumer electronics industry is expected to grow at 9% CAGR during 2017-22 to reach $48.37 bn in 2022, and the Indian appliance and consumer electronics industry is expected to grow at 11% CAGR to reach $21.18 bn in 2019 - 2025.
Air conditioners market in India to increase to 16.5 million units by FY25 from 6.5 million in FY19
Refrigerator market in India to increase to 27.5 million units by FY25 from 14.5 million in FY19
Washing and laundry machines market in India to increase to 12.6 million units by FY25 from 7 million in FY19
LED market in India to increase to $8.21 bn by FY24 from us $ 3.59 billion in FY19
India has a growing consumer goods ecosystem where major brands have pushed for local manufacturing as consumers seeking simple and convenient consumer goods. India also has an improving infrastructure ecosystem for manufacturers as more industrial parks are established.

Increasing electrification of rural areas and the wide usability of online sales will also aid growth in demand. Refrigerators and consumer electronics goods will witness higher demand in rural markets.
It is a highly concentrated industry wherein the top five player’s market share is 75% for washing machines and refrigerators and 55-60% for air conditioners

•    India's imports for air conditioners, refrigerators, and washing machines amounted to $1.86 bn
•    white goods
•    India imports primarily come from China, Thailand, and Vietnam in the sector
•    white goods
•    India's exports for air conditioners, refrigerators, and washing machines amounted to $439 mn
•    white goods
•    India’s biggest export destinations in white goods are United Arab Emirates, Sri Lanka, and the United States


FASTENER MARKET IN INDIA
Asia-Pacific is the largest market for fasteners in these years, accounting for a major share of the fasteners manufactured globally. The major reason for this growth can be attributed to the increasing number of construction activities and growing automobile manufacturing in countries like China and India.

Owing to its application in diverse sectors, a wide range of fasteners are manufactured in the Indian market, which include exhaust bolts, balance wheel bolts, standard hexagon screws/bolts, socket head cap screws, socket shoulder screws, weld nuts, square nuts, hexagon nuts, self-tapping screws and others. With help from the Indian government’s ‘Make in India’ initiative, the Indian manufacturing sector is expected to generate huge demand for the industrial fasteners market.

The Indian industrial fasteners market is expected to reach a value of INR 460 Bn by 2023 expanding at a CAGR of ~9.6% from 2018. Fastener companies usually sell their products in India through various distribution channels- distributors, direct dealers, online channels and industrial events. De-licensing of the industry is facilitating the entry of major global manufacturers in the Indian market. The majority of fasteners that were imported by India in FY 2018 was other screws and bolts, whether or not with their nuts or washers followed by other non-threaded articles and threaded nuts.

The Indian industrial fasteners market is segmented on the basis of application, product type and the organization of the market. The Indian automotive sector is expected to be the largest consumer of industrial fasteners, accounting for a major share of the market by 2023. This will be because of owing to increased automotive manufacturing in the country. Increasing sale of automobiles in India is significantly driving the growth of the auto ancillary market in the country, including automobile sector-specific fasteners. Growing usage of fasteners for manufacturing automotive parts such as engines, chassis, moulding, suspension system and wheels among others, is expected to drive the growth of the Indian industrial fasteners market during the forecast period. It is followed by the construction and the engineering sector.

High-tensile fasteners are mainly used in the construction and engineering sector, whereas mild steel fasteners are used in manufacturing automobiles. Currently, there has been a shift in preference of manufacturing fasteners by using stainless steel, iron, brass, aluminium, nickel and plastics and composites.
 

Fasteners Imported by India in 2020 

Exporters

Value imported in 2020 (USD thousand)

Share in India's imports (%)

Quantity imported in 2020/tons

Total

608,189

100

134,378

China

129,418

21.3

71,273

S.Korea

90,357

14.9

16,058

Japan

72,632

11.9

6,997

Germany

68,595

11.3

6,499

USA

42,091

6.9

2,391

Taipei, Chinese

31,448

5.2

11,578

Singapore

30,865

5.1

2,894

Thailand

23,684

3.9

3,507

United Kingdom

19,983

3.3

2,059

Italy

18,817

3.1

2,111

France

11,479

1.9

394

Netherlands

10,416

1.7

1,286

Belgium

7,238

1.2

956

Hong Kong, China

6,785

1.1

1,417

Switzerland

6,415

1.1

224

United Arab Emirates

4,907

0.8

786

Sweden

4,546

0.7

330

Viet Nam

2,825

0.5

171

Spain

2,703

0.4

496

Malaysia

2,428

0.4

288

Czechia

2,394

0.4

260

Turkey

2,261

0.4

417

Brazil

2,137

0.4

204

Indonesia

2,063

0.3

375

Denmark

1,918

0.3

164

Source: ITC

 

Fasteners Exported by India in 2020 

Importers

Value exported in 2020 (USD thousand)

Share in India's exports (%)

Quantity exported in 2020/tons

Total

468,735

100

209,636

United States of America

100,055

21.3

55,266

Germany

60,561

12.9

18,540

Netherlands

50,415

10.8

14,019

United Kingdom

35,508

7.6

20,993

United Arab Emirates

25,849

5.5

14,693

Italy

18,515

3.9

5,992

Saudi Arabia

13,319

2.8

8,512

Qatar

11,674

2.5

6,350

Brazil

10,633

2.3

3,822

France

10,041

2.1

2,995

Nepal

8,174

1.7

5,494

Spain

7,836

1.7

2,839

China

7,582

1.6

1,956

Poland

6,396

1.4

2,734

Australia

6,145

1.3

1,852

South Africa

5,437

1.2

2,902

Canada

4,554

1

1,651

Nigeria

4,251

0.9

2,008

Bangladesh

4,060

0.9

2,546

Burkina Faso

3,534

0.8

2,648

Mexico

3,302

0.7

955

Kuwait

3,267

0.7

2,029

Sri Lanka

2,817

0.6

1,288

Sweden

2,760

0.6

1,082

Oman

2,670

0.6

890

Source: ITC