Japanese machine tool manufacturers are increasing their investments in India as they seek to capitalize on the country’s growing manufacturing sector, according to a report by Nikkei Asia. Companies such as Tsugami, Brother Industries, and Shibaura Machine have announced significant developments, contributing to a rise in India-bound orders.
Tsugami, a Tokyo-based producer of automatic lathes, inaugurated its first Indian casting plant in April and plans to open a processing and assembly plant by April 2025. The combined investment for these facilities is approximately 3.6 billion yen ($23 million). Similarly, Brother Industries recently launched a factory near Bengaluru at a cost of 2.5 billion yen, while Shibaura Machine opened a 4 billion yen injection molding equipment facility in July.
Brother Industries has completed construction of a new machine tool manufacturing facility near Bengaluru, India. This is the company’s third such facility, following plants in Japan and China. The factory, located in the Japan Industrial Township in Tumakuru district, approximately 1.5 hours from Bengaluru, is set to begin operations in December 2024.
The factory will initially manufacture standard machine tool models (S500Bd1 and S700Bd1) and is expected to support industries such as automobiles, motorcycles, and medical devices. The facility spans a site area of 32,100 square meters with a building area of 6,100 square meters and a total floor area of 7,300 square meters.
India-bound orders from members of the Japan Machine Tool Builders’ Association (JMTBA) totaled 51.1 billion yen in 2023, nearly tripling over the past decade and accounting for 5% of overseas orders. From January to October 2024, orders to India surged 32% year-on-year, reaching 53.6 billion yen. India now ranks fourth in Japanese machine tool orders, trailing only the U.S., China, and Germany. In the same period, Japan exported 106 billion Yen worth of machine tools to the regions of Southeast Asia and South Asia.
India’s manufacturing sector has expanded significantly, driven by industries such as information technology, automotive, and semiconductors. Major contributors include domestic automakers like Maruti Suzuki and Tata Motors, as well as global players like Apple, which has begun producing iPhones in India.
“Demand for machine tools in India will continue to grow across diverse industries,” Yoshiharu Inaba, chairman of JMTBA and factory robot maker Fanuc, told Nikkei Asia.
The growth aligns with the Indian government’s “Make in India” initiative launched in 2014 to attract foreign manufacturing investments. Japan Machine Tool Builders’ Association plans to establish a pavilion for Japanese manufacturers at the upcoming Imtex machine tools expo in India.
However, Japanese manufacturers face challenges, including competition from Chinese suppliers offering lower-cost alternatives. According to industry data, while imports of Japanese tools into India increased by 5% in fiscal 2023, imports of Chinese tools grew by 22%, further solidifying China’s foothold in the Indian market.
In the first half of fiscal 2024, spanning April to September, Tsugami’s revenue from India totaled ¥2,184 million, reflecting a 5.3% year-on-year decline. The Indian segment recorded a loss of ¥127 million during this period, compared to a loss of ¥22 million in the corresponding period of the previous fiscal year.
The majority of revenue from India was generated by sales of automatic lathes, which contributed ¥2,104 million. Other product lines, including machining centers, rolling machines, specialized machines, and services, accounted for a smaller portion of the revenue.
This performance indicates a contraction in both revenue and profitability for Tsugami’s operations in India during the first half of the fiscal year.
Amid slowing domestic demand in Japan, where machine tool orders have declined for over two years, India presents a promising growth opportunity. Analysts suggest that rising demand for Japanese machine tools could lead to subsequent adoption of advanced factory automation technologies, creating additional avenues for companies such as Fanuc, Yaskawa Electric, and Daifuku.
This expansion underscores Japan’s strategic focus on India as a key market in its global manufacturing network.