India’s manufacturing sector records a robust performance as PMI rises to 16-year high
India’s manufacturing sector had a great performance in March, supported by high sales and production, according to a monthly survey released on Tuesday. The HSBC India Manufacturing Purchasing Managers’ Index (PMI), which is seasonally adjusted, increased for the 33rd consecutive month in March, reaching a 16-year high of 59.1 from 56.9 in February.
The HSBC manufacturing PMI increased from an 18-month low of 54.9 in December of last year to 56.9 in February and 56.5 in January.
But according to the study, there was a slight increase in cost pressures in March, reaching their highest point in five months. The questioned companies stated that they had to pay extra for steel, cotton, iron, plastics, mechanical tools, and steel. However, because manufacturers increased prices to the least degree possible over a year and continued to prioritize keeping customers satisfied, the increase in selling price was subdued.
Editor’s Note: India’s manufacturing sector surged in March, with the PMI hitting a 16-year high of 59.1, driven by robust sales and production. Despite a slight uptick in cost pressures, manufacturers prioritized customer satisfaction, leading to subdued increases in selling prices.
Reliance’s Tamil Nadu campus will be Meta’s first data centre: Report
According to a story published in the Economic Times on Tuesday, Meta Platforms, the company behind Facebook, Instagram, and WhatsApp, plans to establish its first data centre in India at the Reliance Industries Ltd (RIL) campus in Chennai.
A deal was made between Meta chairman and chief executive Mark Zuckerberg and RIL in early March, according to sources. It’s unclear how much the deal is worth.
In order to speed up data processing in its biggest market, Meta plans to run four to five nodes throughout the country. Currently, the social media giant has 22 data centres across the globe. The only hub for the company in the Asia-Pacific area is Singapore, where data on Indian consumers of Meta products is maintained.
Editor’s Note: Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp, is set to establish its inaugural data center in India at Reliance Industries Ltd’s campus in Chennai, as reported by the Economic Times. This move underscores Meta’s commitment to the Indian market, aiming to enhance data processing efficiency by deploying multiple nodes across the country, with a significant focus on India, its largest market in terms of users.
ICEA in talks with fund houses to establish an exchange for high tech India firms
The electronics industry is in the initial stages of negotiations with fund houses to establish a secondary market, potentially modelled after the STAR Market of the Shanghai Stock Exchange. Touted as Shanghai’s Nasdaq, the SSE STAR Market gives Chinese companies operating in high-tech and strategically growing sectors better access to capital markets. The establishment of this kind of exchange in India coincides with the government’s goal to produce electronics worth $1 trillion over the next five years.
India Cellular & Electronics Association (ICEA), a trade association for the electronics sector, is spearheading the discussuions.
According to CEA founder Pankaj Mohindroo, these are relatively new industries, and ICEA has already begun speaking with fund houses. He declined, however, to identify the funders with whom they were negotiating.
Editor’s Note: The India Cellular & Electronics Association (ICEA) is in talks with fund houses to establish a secondary market for high-tech Indian firms, drawing inspiration from the Shanghai Stock Exchange’s STAR Market. This initiative aligns with the Indian government’s ambitious target of generating $1 trillion worth of electronics over the next five years, signifying a concerted effort to bolster capital access for burgeoning tech industries.
PLI schemes draw more than Rs 1.06 lakh crore in investments till December
According to official data, investments under production-linked incentive (PLI) schemes for 14 industries have drawn over Rs 1.06 lakh crore till December 2023, with solar modules and pharma making up about half of the total.
Up until December of last year, the IT hardware, auto and auto component, textile, and ACC battery storage sectors showed a poor response to the schemes.
With an investment of Rs 1.97 lakh crore, the government unveiled PLI schemes in 2021 for 14 sectors, including telecommunication, white goods, textiles, medical device manufacturing, cars, speciality steel, food products, high-efficiency solar PV modules, advanced chemistry cell batteries, drones, and pharma.
Editor’s Note: Investments exceeding Rs 1.06 lakh crore have been attracted by India’s production-linked incentive (PLI) schemes across 14 industries as of December 2023, with solar modules and pharmaceuticals accounting for nearly half of the total sum. However, sectors such as IT hardware, automotive, textiles, and ACC battery storage displayed a subdued response to the schemes by the end of December last year, despite the government’s introduction of PLI initiatives totaling Rs 1.97 lakh crore in 2021 across various sectors.
RRP Electronics to invest Rs 5,000 crore in a semiconductor facility
RRP Electronics, a company backed by Sachin Tendulkar, revealed plans on Tuesday to invest Rs 5,000 crore in a semiconductor facility located in Maharashtra. This investment will be spread out over the next five years. While the specifics of Tendulkar’s contributions and other stakeholders remain undisclosed, the announcement highlighted the unveiling of a 25,000-square-foot facility in Navi Mumbai on March 23. The inauguration ceremony featured notable figures such as Tendulkar, retired nuclear physicist Anil Kakodkar, and the company’s founder, chairman, promoter, and chief executive Rajendra Chodankar.
The newly unveiled facility operates as an outsourced semiconductor assembly and testing (OSAT) facility. Future plans include the establishment of a comprehensive research and development center alongside an expanded setup integrating a fab foundry and multi-line OSAT capabilities.
Editor’s Note: RRP Electronics, spearheaded by Sachin Tendulkar, is set to invest Rs 5,000 crore in a semiconductor facility in Maharashtra over the next five years. The unveiling of a 25,000-square-foot facility in Navi Mumbai on March 23 marked the commencement of this ambitious venture, with plans for further expansion to encompass comprehensive research and development alongside fab foundry and multi-line OSAT capabilities.
Domestic startups facing increased scrutiny from income tax authorities
In recent weeks, several emerging ventures in the new economy realm, particularly within the fintech sector, have found themselves served with income tax notices, as disclosed by informed sources. These notices, issued under Section 68 of the Income Tax Act, amalgamate the investments received by these startups with their earned income, resulting in the imposition of taxes and penalties on the combined sum.
Under Section 68 of the I-T Act, if a company fails to adequately elucidate the nature and origins of its received funding, authorities reserve the right to tax the capital raised in conjunction with the startup’s earnings for the pertinent year. Conversely, these tax obligations are rescinded if the company provides a satisfactory account and submits the requisite documentation. Typically, startups recognized by DPIIT are not subjected to such rigorous scrutiny.
Editor’s Note: In a concerning trend, domestic startups, especially those in the fintech sector, are facing heightened scrutiny from income tax authorities, who are issuing notices under Section 68 of the Income Tax Act. These notices combine investments received by startups with their earned income, potentially resulting in taxes and penalties unless adequate documentation is provided to justify the funding sources, although typically startups recognized by DPIIT are exempt from such scrutiny.