MADHYA PRADESH - AN EMERGING AUTOMOBILE HUB
MOVING FORWARD WITH THE PM'S VISION OF 'ATMANIRBHAR', THE STATE OF MADHYA PRADESH HAS EMERGED AS AN AUTOMOBILE AND AUTO ANCILLARY HUB OF CENTRAL INDIA
IThe state’s contribution to India's economy will reach USD 550 billion by 2026 as the country is expected to become a USD 5-trillion economy.” ndia has become one of the top start-up destinations in the world. The nation is home to 1.3 billion people, serving as the biggest market for India-based start-ups. The automotive industry is changing quickly. Automobile global supply chains are currently undergoing restructuring. Many multinational corporations are shifting away from their traditional production bases to nations with comparable industrial strengths to diversify their supply chains.
The automobile sector is a key driver of India's economic growth and the largest contributor to the manufacturing sector. Considering the Indian market potential, the available supplier ecosystem, the competitive pricing structure, and government policies, there will be a boost in automobile domestic manufacturing.
There is a boost in exports due to the policy initiatives taken by the government, such as the Make-in-india and PLI programmes, which will also support domestic manufacturing.
The automobile industry contributes to nearly 7.1% of India's GDP and 49% of manufacturing GDP and is a leading employment provider. The automotive industry in India is worth more than US$222 billion and accounts for 8% of total exports. The auto component industry is worth US$ 53 billion, with US$ 19 billion in exports. In value terms, the Indian automotive industry is ranked fourth in the world. The automotive components industry in India, which currently contributes 2.3% of India's GDP, is expected to become the world's third largest by 2025. The Indian automotive industry is expected to reach around USD 300 billion by 2026, wherein the centrally located Madhya Pradesh state is expected to be the driving force.
Madhya Pradesh has turned out to be the growth centre of India in the last decade. The state has witnessed an upward trend in economic growth, social development, and gross state domestic product (GSDP). The state's strategic location makes it an ideal location for the manufacturing hubs to thrive and contribute to the growing Indian automobile sector.
INFRASTRUCTURE IN MADHYA PRADESH
The state has easy connectivity with large markets and major cities such as Delhi, Mumbai, Ahmedabad, Hyderabad and Kolkata. Madhya Pradesh possesses a road network of 160,000 km. The state has a well-developed infrastructure, including:
25,800 MW of surplus power
95+ Industrial Areas with more than 2,00,000 acres of total land bank
1000 MCM water reserved for industry Delhi-mumbai Industrial Corridor (DMIC). The state has developed industrial and investment regions like Pithampur-dhar-mhow, Ratlamnagda, Shajapur-dewas and Neemach-nayagaon along the corridor.
Inland Container Depots - 6 ICDS with connectivity to all major Indian ports to encourage exports.
The state also has premier testing facilities like the Central Farm Machinery Training and Testing Institute at Budhni and NATRAX at Pithampur.
ROBUST CONNECTIVITY OF MADHYA PRADESH
The state has good air, rail and road connectivity, which ensures seamless supply-chain management and a high export-import potential.
Air Connectivity - 100 flights out of 5 commercial airports and 26 airstrips, of which two have domestic air cargo facilities and one has international air cargo facilities.
Rail Connectivity - Operating more than 20 significant rail intersections, more than 500 trains pass through the state every day.
AUTOMOBILE AND AUTO COMPONENT ECOSYSTEM IN MADHYA PRADESH
There are more than 10 original equipment manufacturers (OEMS), 2770 engineering manufacturers, and 200 auto component manufacturers present in the state, which employ a workforce of 200,000 technical professionals.
Also, there are sector-specific skill development institutes like:
Indo-german Tool Room - An initiative between the Government of India and the Federal Republic of Germany
Pithampur Auto Cluster LTD (PACL) - An initiative of the Government of Madhya Pradesh
MSME Technology Centre, Bhopal - An initiative between the Government of Madhya Pradesh and the Government of India with support from the World Bank
Central Farm Machinery Training and Testing Institute, Budni - An initiative of the
Government of India
The state also has leading auto clusters of India at Pithampur near Indore, and Mandideep near Bhopal having exports of US $ 26.24 Million from Madhya Pradesh in FY 2021-22.
PITHAMPUR: AN EMERGING AUTO HUB OF INDIA
Pithampur auto cluster is an emerging auto hub in central India. It is home to top-notch industrial infrastructure, spans a total area of around 4,500 hectares, and provides excellent industrial infrastructural facilities. Pithampur's auto cluster has over 120 large and 450 MSME units.
EASE OF DOING BUSINESS
As per the World Bank and the Department for Promotion of Industry and Internal Trade (DPIIT), Govt. of India, Madhya Pradesh has achieved the "Achievers" category in Ease of Doing Business (EODB). The state government has undertaken several initiatives for the implementation of key reforms for the benefit of the industries, such as: Start your business in 30 days
45 services of 8 departments available through the Single Window for starting the business Timeline reduced for all the services
Deemed approvals for the applied services Developed Single Window System (SWS) integrated with 45 services for 12 departments of MP Govt.
Gis-based land allotment
Integrated with India
Industrial Information
System
The investor-friendly policy, transparency, and suitable environment for business have made Madhya Pradesh an attractive investment hub for major domestic and global automobile companies.
ASIA’S LONGEST HIGH-SPEED TESTING TRACK "NATIONAL AUTOMOBILE TEST TRACK" (NATRAX)
A flagship project of the Ministry of Heavy Industries, Government of India, a state-of-the-art automotive testing and certification centre under NATRIP NATRAX is spread across an area of 1200 ha with 11.3 km of test track and an investment of Rs 1653 crore (USD 200 million). It has 14 types of test track, including vehicle dynamics, fatigue, and NVH (noise, vibration, and harshness) testing facilities. High-end vehicles such as BMW, Mercedes, Audi, Ferrari, Lamborghini, and Tesla undergo High Speed Testing (HST), which cannot be measured on any other Indian test tracks. It is easily accessible to all the major manufacturers as it is centrally located in MP. The track can be used for the development of prototype cars according to Indian conditions.
TRAINING AND SKILL ECOSYSTEM Agri Equipment
Prime Minister
Central Farm Machinery Training & Testing Institute, Budni (MP) Auto Components
Indo-german Tool Room, Indore
MSME Technology Centre, Bhopal
ATITC, Indore
SKILL TRAINING INSTITUTE Global Skill Park, Bhopal, MP
POLICY INCENTIVE
MP has a lucrative industrial policy, offering attractive incentives to the industries in the sector. The state government, with a view to strengthening the supply side of the industrial ecosystem, is promoting the establishment of ancillary units near mother units. As part of its incentives policies, the state provides Investment Promotion Assistance (IPA), infrastructure development assistance, power tariff rebates, green industrialisation subsidies, etc. The IPA is a tax-free investment assistance programme that ranges from 40% to 10% of investment in plant and machinery ranging from Rs 10 crore to Rs 150 crore, with an additional incentive for job creation and export-oriented units. There are customised packages available for investments of more than 100 crore in MP.
KEY PLAYERS
Auto companies like VECV, Force motors, Mahindra Two Wheelers
Electric vehicle and components like CAPCO, Carwa Group, Anant Shree, I-scoot
Defence vehicles like Vehicle Factory, Jabalpur
Auto Ancillary like Bridgestone, JK Tyre, Ralson, Rajratan Wires, Varroc Excellence, Cummins, Caparo, Gabriel, Jamna Auto, MAHALE, JBM, Pinnacle Industries, Tata Auto Comp Systems, Craftsman Automation
Farm Vehicles and Components like TAFE, John Deere, Mahindra Agri Earth moving vehicles like Liu Gong, Case New Holland
The 7th edition of the Madhya Pradesh Global Investors Summit 2023 will host a thematic session on automobiles and auto ancillaries on January 11, 2023. The session will include industry captains, sector experts, and government officials to discuss the future of the automobile industry and explore investment opportunities in the state.