JULY 20258US-INDIA TRADE DEAL UNLOCKS $128B BOOST FOR INDIAN MANUFACTURINGINDORE'S NEW INDUSTRIAL HUBS ATTRACT RS 1,633 CR, 14,400 JOBSAs US-India trade talks are set to hit their July 9, 2025, deadline, international markets are closely watching the potential economic spillover effects. A successful partial agreement will see bilateral trade reach $128 billion with huge investment potential in the pharma, auto component, and IT industry. Sectoral irritants and geo-political nuances, however, are the main holdouts.Pharmaceuticals feature prominently in the trade deal too. India ships more than $8 billion worth of pharmaceuticals to the US, which accounts for 40% of its business in generic medicines. If tariffs decrease, Indian companies such as Sun Pharma and Dr. Reddy's, whose US revenues account for more than 35% of their turnover, can expect better margins and increased R&D spend. India is, however, looking for reciprocity to protect its $38 billion domestic industry.In the automotive industry, India wants more US market access but is cautious not to reduce its own protectionist duties that are already 50 percent on steel and 25 % on automobiles. Tata Motors and Ashok Leyland, to name two, would benefit from EV-component pieces if targeted under India's "Make in India" initiative, although this depends on US concession.The $33 billion IT services sector is projected for expansion. While the US waits for cloud and cybersecurity players to enter, Indian players such as TCS, Infosys, and Wipro stand ready to serve the growing US demand for digital and AI services.Geopolitical uncertainties such as potential Chinese retaliation and Indian strategic non-alignment make it tougher. Investors are cautioned to be cautious on US-exposed sectors such as pharma and IT, but over-weight on auto components.A successful one can bring in a multi-year bull run for Indian equities. But a failed one can lead to tit-for-tat US tariffs, derailing $87 billion worth of trade. Indore is quickly becoming a viable growth zone for manufacturing with the establishment of new industrial estates in Kasarwardi, Jetapur, Budhi Barlai, and an expanded Pithampur zone, as investments of Rs 1,633 crore have recently been approved for these new locations by various companies.These new zones, supported by the Madhya Pradesh Industrial Development Corporation (MPIDC) are anticipated to create as many as 14,400 jobs, effectively building on Indore's manufacturing presence.TOP STORIES· Pharma gains likely if tariffs ease; Sun Pharma and Dr. Reddy's stand out· IT services poised to grow, led by TCS, Infosys, and Wipro in AI/cloud· Geopolitical risks persist, with China and strategic autonomy in playSome of the investments will include a Rs300 crore project by OFB Tech Pvt Ltd for a footwear and bag manufacturing unit at the Pithampur Sector-7, and a Rs 272 crore project from Ora Securities Pvt Ltd for a garment manufacturing unit in Budhi Barlai. Additionally, Ardee Engineering Ltd has also recently expanded its operations in Pithampur with an investment of Rs150 crore, no doubt this investment will enhance the district capability for engineering and industrial equipment manufacturing.GSEC Waste Management Solutions will be investment Rs 45 crore for an industrial hazardous waste treatment and brick manufacturing unit as well as Client Tech Associates installing a Rs 29 crore water purifier plant in Jetapur-Palasia.Investments in Indore reflect a diverse range of industries including the textile, footwear, engineering, waste management, and water purification sectors. The investments has firmly positioned Indore as an industrial area in Central India. With the right facilitation from the government and the support of its regional advantages, Indore will continue to receive industrial interest as they create job opportunities, additional infrastructure and economic growth.
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