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Impact of geopolitics on manufacturing

Manufacturing growth in India

We hosted Ms. Shveta Arya, MD of Cummins India, as part of our CEO track session at AGIC 2025. Here are the key takeaways of the session:

Witnessing positive demand triggers amid volatile global situation

The overall manufacturing space in India is witnessing positive demand triggers from both urban and rural regions, aided by a stable government at the center, policy initiatives such as proposed GST rate changes, focus on infrastructure development, and policies related to the indigenization of manufacturing. All these factors are driving improvement in overall manufacturing growth in India. Segments such as electronics, renewables, auto components, pharma, hospitality, etc. are growing quite well.

US tariff can impact supply chains and global demand in near term

The current US tariff situation is resulting in potentially higher cost of exports from India and is making China and Vietnam more competitive in terms of costing for exports. It is still uncertain how the situation will pan out in the future. However, India has established itself as a good hub for meeting the demand for exports. Players like Cummins have already established themselves as preferred vendors for the global supply chain for Cummins Inc. The company can continue to capitalize on its products for other markets beyond the US. Along with this, its widespread network of global vendors will also help the company to adjust supply chains if required.

Domestic powergen market is growing after initial demand pressures from norm transition

Domestic powergen segment is back to pre-emission norm levels in terms of volumes as demand has come back in most of the nodes. Demand has improved from segments such as manufacturing, commercial real estate, quick commerce, hospital, data centers, etc., and the company expects steady growth in demand across these segments.

Cummins will capitalize on BESS demand with its newly launched product

The company had already launched a product on BESS and expects to capitalize on the demand coming from individual establishments in storing the surplus renewable power. Though key components of BESS are currently not made in India, the company designs and assembles them here and has demand coming in from various segments of the industry.

With large part of components already indigenized, Cummins is better placed than others

The company has already indigenized a large part of components that go into its powergen products, except for a few critical electronic components. Thus, it is better than other players in the industry. Also, the company is not much impacted in terms of higher costs due to BIS QCO norms, except for certain logistical delays.

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