Infrastructure and Industry - Newspaper Summary

 The sources detail India’s Infrastructure and Industry landscape in October 2025 as one driven by significant government investment and planning, strategic industrial diversification, and attempts to resolve longstanding regulatory bottlenecks that affect major manufacturing sectors.

I. Infrastructure Development and Financing

India's focus on infrastructure is evident in the government's planning for massive investment and new financing mechanisms, particularly for large projects and emerging industrial corridors.

A. Financing and Risk Management

India aims to spend an estimated ₹390 lakh crore ($4.51 trillion) on infrastructure by 2030 to realize the vision of a $5 trillion economy by 2025 and continue its escalated growth trajectory until 2030, according to the National Infrastructure Pipeline report. Sustaining India's growth heavily relies on the infrastructure sector.

To support this massive requirement, the government is considering a proposal for a ₹20,000 crore risk guarantee fund for the infrastructure sector.

• The primary goal is to attract private sector investment by sharing project risks, thereby reducing the burden on project developers.
• The fund would underwrite the development risk of a new project.
• It is intended to cover losses arising from policy uncertainty and other non-commercial risks, which would encourage lenders to extend larger loans to big projects.
• Sources suggest the fund may be managed by the National Credit Guarantee Trustee Company Ltd (NCGTC).

B. Transportation and Manufacturing Corridors

The quality of infrastructure is cited as one of the biggest hurdles facing the "Make in India" program, which aims to improve the nation’s manufacturing capabilities and support higher growth. Closing this deficit is crucial, as corporate growth and investments can be hampered by weak infrastructure.

A significant development is the finalization of the site for a greenfield airport in Hosur, Tamil Nadu, located between Berigai and Bagalur in Krishnagiri district.

• This strategic placement, only 8 km from Attibele and along the STRR corridor, is expected to unlock a wave of growth in real estate, logistics, and residential demand.
• The project will leverage Hosur’s existing base in EV and electronics manufacturing.
• The airport is expected to complement, rather than compete with, Bengaluru’s Kempegowda International Airport.

C. Industrial Chokepoints (Tunnel Boring Machines - TBMs)

A critical infrastructure chokepoint is the dependence on imported Tunnel Boring Machines (TBMs), which are vital for metro lines, hydropower tunnels, and rail projects.

• The Indian TBM market was valued at ₹8,000 crore in 2023-24 and is projected to exceed ₹11,000 crore by 2029-30.
• India imports all large diameter TBMs (10m and above) from a handful of foreign suppliers, leaving it vulnerable to a supply squeeze.
• China has already reportedly halted direct TBM exports and blocked subcomponents from a German firm's Chinese facilities, highlighting the TBM shortage as a potential geopolitical lever that could delay infrastructure plans.
• India lacks the specialized metallurgy (ultra-high-strength steel), heavy engineering capacity (gear and bearing technologies), and the industrial ecosystem (supplier clusters for cutters, seals, etc.) necessary for TBM production.

A detailed roadmap is proposed to indigenize TBM manufacturing, focused on:

• Launching an incentive scheme tied to domestic value addition and mandating that global suppliers establish local assembly and machining plants to win government contracts (metro, hydropower, highway projects).
• Enabling public sector engineering enterprises to anchor joint ventures with global TBM makers.
• Establishing a local component ecosystem for large bearings and high-torque gearboxes.
• Creating a Centre of Excellence in Tunnelling Machinery at institutions like IITs and IISc.

II. Industrial Policy, Investment, and Manufacturing

The industry landscape is defined by massive success in electronics manufacturing schemes, significant investments in the auto component sector, and regulatory intervention in core industries.

A. Electronics Component Manufacturing (ECMS)

The Electronics Component Manufacturing Scheme (ECMS), approved in March, has garnered investment proposals that far exceed government expectations.

• The government received 249 applications proposing investments totaling ₹1.15 lakh crore ($13 billion), nearly double the target of ₹59,350 crore.
• The production estimates received exceed ₹10.34 lakh crore ($116 billion), more than double the targeted ₹4,56,500 crore.
• The scheme is expected to create 1.41 lakh jobs, exceeding the initial target of 91,600.
• The applications demonstrate India’s potential to become a critical pillar in global electronics manufacturing and help achieve the target of a $500 billion domestic electronics ecosystem by FY31.

B. Auto Components and Global Expansion

The Indian auto component industry is actively pursuing global expansion strategies, often following the blueprint set by market leader Samvardhana Motherson International Ltd.

• This global push is motivated by headwinds in major export markets (US and Europe) and high tariffs in the US.
• India’s auto component industry grew 9.6% in FY25, with total revenue reaching ₹6.73 trillion.
• Companies are strategically deploying capital to enter new geographies (Europe, Latin America, Asia) and strengthen local play. Examples include:
  • Tata AutoComp acquiring companies in Europe (UK’s Artifex Interior Systems and Slovakia’s IAC group) and entering a joint venture in Mexico.
  • Sona Comstar entering China through a joint venture to target the EV market, countering North American tariff issues.
  • Minda Corp. striking joint ventures in Taiwan, China, and Japan for sunroofs, switches, and EV components.
  • Anand Group acquiring a majority stake in Swiss auto electronics firm APAG Holding.
• This expansion aims to boost revenue substantially, with companies like Minda Corp. targeting revenue growth of more than three times by 2030.

C. Mining, Metals, and Regulatory Adjustments

The materials and mining sectors show mixed dynamics, influenced by global trade and domestic regulatory concerns.

Steel Industry & International Acquisitions:

• Czech billionaire Daniel Kretinsky sold his 20% stake in Thyssenkrupp Steel Europe (TKSE) and scrapped plans for a 50:50 joint venture.
• This move paves a clear path for India's Jindal Steel International (led by Naveen Jindal's private firm) to acquire TKSE, intensifying talks for an indicative bid made last month.
• If the deal succeeds, Jindal Steel would become the third Indian steelmaker (after Tata Steel and ArcelorMittal's Lakshmi Mittal) to build a significant European manufacturing base. Jindal has pledged €2 billion to support decarbonization and secure steelmaking in Germany.

Copper and Trade Agreements:

• The Indian Primary Copper Producers Association (IPCPA) raised serious concerns over surging copper rod imports from the UAE under the India-UAE Comprehensive Economic Partnership Agreement (CEPA).
• The IPCPA warned that UAE firms convert imported copper cathodes into rods with minimal value addition, yet they benefit from the duty cut (from 2% to 1% in FY25).
• This trend, which saw imports surge 239% in FY25, is feared to undermine domestic investments in copper refining. The association is urging a revision of the Product-Specific Rule (PSR) under CEPA to prevent minimally processed goods from entering duty-free.

Coal and Power Sector Regulation:

• Coal demand is expected to remain sluggish in the current fiscal year due to an extended monsoon and a domestic market glut, despite strong long-term prospects tied to thermal power projects.
• However, the sector is dealing with a significant regulatory hurdle: the CERC (Central Electricity Regulatory Commission) has initiated proceedings to address 'change in law' events caused by the recent GST rate rationalization.
• The GST changes increased the rate on coal procurement from 5% to 18% while abolishing the compensation cess of ₹400 per tonne. The CERC is seeking uniform regulatory direction for tariff adjustments across power purchase agreements (PPAs) that were impacted by these statutory changes.

Fertilizers and Agriculture:

• The Commission for Agricultural Costs and Prices (CACP) recommended that the price of urea be increased in a phased manner to curb its excessive and imbalanced use, which is currently leading to a distorted nutrient ratio in soils.
• Urea is highly subsidized, sold at a statutorily notified Maximum Retail Price (MRP) of ₹242 per 45-kg bag.
• The CACP proposed that subsidy savings from the price increase should be used to provide higher subsidies for P&K fertilizers to address nutrient imbalance.

D. Investment in Established and Niche Manufacturing

• Global resistance materials producer Kanthal inaugurated a wire manufacturing facility expansion at its Hosur plant, more than tripling its production capacity. This expansion is driven by increased local demand, the 'Make in India' push, and the growth of electronics, semiconductors, EV, and renewable energy sectors in India and Asia.
• SKF India plans to invest up to ₹1,460 crore by 2030 across its newly demerged automotive and industrial businesses (including capacity expansion and a new plant in Pune by 2028). The industrial entity will focus on heavy industries forming the backbone of India’s industrialization and energy transition.
• A joint venture between Linc Ltd and Japan's Mitsubishi Pencil Co Ltd, Uni Linc India Pvt Ltd, inaugurated a ballpoint pen facility in Umbergaon, Gujarat, aimed at merging Japanese technology with pricing suited for India's high-demand volume market.
• Tata Power Renewable Energy Ltd signed an agreement to set up an 80 MW FDRE (firm and dispatchable renewable energy) project for Tata Power Mumbai Distribution at a cost of ₹1,200 crore. This project integrates solar, wind, and battery storage systems for reliable energy dispatch during peak demand.