Mini Feature GLOBAL MANUFACTURING HUBS (GMHs) IN INDIA

By: Dr K C Gupta, YBB Personal Finance

CONTRARIAN INDICATORS

AAII Bull-Bear Spread -1.3% (below average)
CNN Fear & Greed Index 34 (fear)
NYSE %Above 50-dMA 37.78% (negative)
SP500 %Above 50-dMA 39.20% (negative)

ICI Fund Allocations (Cumulative), 7/31/26
OEFs & ETFs: Stocks 62.92%, Hybrids 3.89%, Bonds 17.00%, M-Mkt 16.19%

INTEREST RATES

CME FedWatch
Cycle peak 5.25-5.50%
Current 3.50-3.75%
FOMC 9/16/26+ hike
FOMC 10/28/26+ hold

Treasury

T-Bills 3-mo yield 4.07%, 1-yr 4.35%; T-Notes 2-yr 4.63%, 5-yr 4.78%, 10-yr 4.96%; T-Bonds 30-yr 5.35% (normal yield-curve);
TIPS/Real yields 5-yr 2.38%, 10-yr 2.60%, 30-yr 3.07%
FRNs Index 3.837%

Bank Rates
 www.depositaccounts.com/


Stable-Value (SV) Rates, 9/1/26
TIAA Traditional Annuity (Accumulation) Rates
Restricted RC 5.50%, RA 5.25%
Flexible RCP 4.75%, SRA 4.50%, IRA-101110+ 4.20%
TIAA MYGA 4.75% (3-yr), 4.95% (5-yr), 5.05% (7-yr)
TSP G Fund 4.875% (previous 4.875%)

India Fear & Greed MMI 26.71 (extreme fear)
Weekly ETFs: INDA -2.68%, EPI -2.42%, INDH -1.53%, SMIN -1.44% | SPY -0.77% 

The data above are as of Sunday preceding the publication date.

ECONOMY

Indian GDP growth for Q2 was +7.8% (real). India recently revised its GDP calculations, so the new GDP series should be used for GDP changes. Mixing the data from 2 series is wrong. This rapid economic growth isn’t reflected in broad Indian stock indexes that are in funk. This is because much of the recent stock market action has been in small/mid-size companies (SC/MC), not in large-caps (LC). Higher import prices (oil, gas, fertilizers, etc) & falling rupee are other factors.
India ETFs trading in US include LC: INDA, EPI, INDH (rupee-hedged), & SC/MC: SMIN. As per MSCI India index, SMIN has bottom 14% of the market-cap; a different Morningstar global classifications shows LC 8%, MC 77%, SC 15%.

HEALTHCARE

Med-tech DePuy Synthes (JNJ) is establishing a global GCC in Bengaluru, India to focus on software, analytics & healthcare technology development. DePuy specializes in products & tools related to orthopedic surgeries. J&J is planning to sell DePuy.

INDUSTRIALS
US Lumin Innovations (Illinois) & Indian MetalKraft joint-venture (JV) LuminKraft is building a new manufacturing facility in Hyderabad to expand its manufacturing of wire harnesses, cables & electrical connectors for renewable energy, datacenter, EVs, autos, industrial & defense applications.

INFRASTRUCTURE

Indian infrastructure company GMR Group (infrastructure, energy, airports, highways, railways/metros, enterprises) wants to build more airports in Philippines. It has already completed 2 airport projects in Philippines. It’s well-known for the operations of Indira Gandhi Airport in New Delhi & several others in India. It’s business model includes public-private partnerships.

IT/TECH

Swiss SEALSQ & Indian Palm Technologies have partnered on quantum technologies for semis, cybersecurity & identification. Applications will be for financials, industrials, transportation, defense.

SPECIAL TOPIC – GLOBAL MANUFACTURING HUBS (GMHs) IN INDIA

Similar to IT GCCs, several global manufacturing hubs (GMHs) are evolving in India. These design & manufacture products for global markets. These are not just Indian subsidiaries of foreign companies distributing or manufacturing products for the Indian markets.

In some respects, the Indian markets are different. The product needs are different & affordability is also different. Many products for the Indian markets tend to be basic with limited features to achieve reasonable price points for Indian population. Lot of technology transfer is targeted in this area. The developed countries won’t transfer their most advanced technologies but are willing to transfer technology that may be 1-2 generations behind.

The new GMHs aren’t under such local market constraints, but instead, compete head-on with products globally at their global price points. These require state-of-the-art R&D & manufacturing of products for exports. Many are joint-ventures (JVs) between Indian & foreign companies (from Europe, Japan, S Korea, Taiwan, US). Indian manufacturing is 17% of GDP & only 2.87% of global manufacturing.

The rules for foreign investments & ownerships have been relaxed – details vary by industries. Various central & state government incentives are available. There is a large educated & technically competent population. Wages are low. In the past, India often got overlooked by global companies but the timing now seems right.

India has several good ports & global shipping routes. Indian Navy also is active in maritime security & protection. Unfortunately, land routes are limited due to some unfriendly neighbors. However, intermodal shipments are possible to most countries in the world. Some delicate products may also use more expensive air shipments.

These GMHs are found in & around Ahmedabad (Gujarat), Bengaluru (Karnataka), Chennai (Tamil Nadu), New Delhi (Delhi NCR), Pune (Maharashtra), Sri City (Andhra Pradesh). They cover autos, aviation, chemicals, electronics, pharma, phones, semis, solar, etc.

For more information, see https://ybbpersonalfinance.proboards.com/