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This week's edition takes a look at India’s opportunity in circular approaches, the European machinery makers’ focus on India as growth market, and more must-know news.

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With economic growth and a digital-first economy, the number of electronic products the Indian society uses and replaces will continue to increase. As the world's third-largest e-waste producer today, businesses are starting to recognise the immense opportunity to build a sustainable, circular economy in India.

India generated 3.2 million tons of e-waste in 2019 (total waste annually: 62 million tons). There are many reasons to replace an electronic device: the wish for something new, or when a broken device requires replacement. According to Redseer data, the consumer segment accounts for 70% of the total generated e-waste.

The consumer market’s contribution to e-waste is substantial:

This becomes even more concerning when considering that according to Geostrata

In order to mitigate the situation, Indian businesses start embracing Supply Chain 4.0, a technology driven approach based on Internet of Things (IoT), AI and data analytics solutions in order to facilitate a closed-loop approach.

And there are some promising first signs of improvement:

European companies are recognising the large market potential. French multinational Veolia announced expansion plans targeting a capacity of 530,000 tonnes for hazardous waste treatment by 2030. The company is also active in India’s wastewater treatment.

While not yet comparable to EU standards, a national e-waste registry for lifecycle tracking or relevant systems could be an opportunity, particularly given initial successes in the market for refurbishment:

Replacing old, power-hungry products can help to reduce energy consumption and stress on India’s grid. This is particularly important as cooling demand, a key driver for power consumption, is expected to grow eightfold by 2038 and will require 1.2 billion air conditioning units.

The market potential for modern, energy-efficient products is substantial across electronic segments. Liebherr Appliances India, a subsidiary of German multinational Liebherr Group, announced the first made in India fully integrated fridge-freezer-combination. India is the only country outside Europe where Liebherr manufactures these products, highlighting the market’s importance.

India will become the second largest consumer market by 2030, and the local electronics manufacturing capacity is expected to reach USD 280-500 billion by then. As a resource-constrained economy, the potential for low-energy products, recycling, and circular approaches is immense and should be increasingly pursued by European businesses as the significan opportunity that it represents.

Sources: The Economic Times, ICEA, Accenture, Redseer, Geostrata, IBEF, Times of India, Construction World

In a recent business climate survey, Europe’s largest association for machinery and equipment manufacturers VDMA surveyed European companies about their international business sentiment. The Frankfurt, Germany, based organisation compared the business sentiment for China, Brazil, the US and India. The top spot: India.

The survey report reveals two key developments:

While the situation in China remains difficult and uncertainties around US policy developments impact plans for most surveyed companies, India is emerging as a reliable growth market for the industry.

This positive sentiment aligns with the broader manufacturing sector performance. The HSBC India Manufacturing Purchasing Manager Index reached a 14 month high in June, driven by:

The export orders reached the third-highest growth rate since data collection started in March 2005, leading to the highest rate of hiring since the survey began two decades ago. High demand from the US could further indicate the shift of manufacturing from China to India, driven by lower tariffs for products made in India and ongoing uncertainties with regards to US-China trade developments.

The combination of growing demand and manufacturing capacity also requires a skilled workforce to execute. Based on a five-year project, the Indian government plans to collaborate with Germany, France, Italy and other nations to establish National Centres of Excellence. Goal is to create a larger pool of skilled workforce that meets global standards in key industries, as India aspires to become a major international manufacturing hub.

In my view, India represents a key market for European companies. As I shared in the last issue, German and a growing number of European companies are not only recognising the geopolitical shift, but are increasingly concerned about falling behind over the next five years. I expect European investments in the Indian market to grow substantially, especially once the India-EU Free Trade Agreement is signed.

Sources: Fortune India, The Economic Times

The German broadcasting service Deutsche Welle produced a 26 minutes report on India’s circular economy and circular thinking.

You can find more details and can watch the video via the embedded link above.

Your random facts and stories about India and the Indo-European friendship.

This week: the Indo-European collaboration in paper recycling.

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