Manufacturers signal intent to expand despite persistent constraints

Mumbai: India’s manufacturing sector is showing signs of sustained momentum, with average capacity utilisation holding steady at 75 per cent and more than half of surveyed firms planning to invest or expand operations over the next six months. These findings, drawn from the Federation of Indian Chambers of Commerce and Industry’s (FICCI) latest quarterly survey on manufacturing, reflect cautious optimism across industries despite enduring challenges.

The survey, which covered eight major manufacturing sectors and included responses from both large enterprises and small and medium enterprises (SMEs) with a combined annual turnover exceeding ₹3 lakh crore, found that capacity utilisation levels have remained broadly consistent with previous quarters. Sub-sector data reveals minor variations – machine tools and miscellaneous segments reported higher-than-average utilisation at 77 and 78 per cent respectively, while capital goods and electronics hovered around 70 per cent.

This level of activity, according to FICCI, indicates a stable production environment and a willingness among manufacturers to commit fresh capital. ‘The investment outlook is positive’, the report notes, ‘with over 50 per cent of respondents indicating plans for investments and expansions in the next six months’. This sentiment is echoed across sectors such as automotive, metal products, and textiles, where firms are preparing to scale up capacity in anticipation of stronger domestic demand.

However, the path to expansion is not without friction. Respondents cited a range of constraints that continue to impede growth. Global trade uncertainties – including tariffs, supply chain disruptions, and geopolitical tensions – remain a concern, particularly for export-oriented units. Operational bottlenecks such as raw material shortages, labour availability, and high input costs have also been flagged as persistent issues.

Regulatory hurdles, especially those affecting compliance and approvals for new projects, were mentioned by several firms as a deterrent to timely execution. In some cases, manufacturers reported delays in securing industrial land and navigating environmental clearances, which have slowed down planned investments. A respondent from the capital goods sector noted that ‘uncertainty in demand and financial constraints make further investments difficult’, underscoring the need for more predictable policy support.

Despite these challenges, the survey suggests that access to finance is not a major barrier for most firms. Over 81 per cent of respondents reported sufficient availability of funds from banks for working capital and long-term capital needs. The average interest rate paid by manufacturers stood at 8.9 per cent, with some sectors such as capital goods reporting slightly lower rates.

The broader investment intent appears to be driven by a combination of stable production levels, anticipated demand recovery, and sector-specific policy measures. Recent goods and services tax (GST) rate cuts, for instance, have boosted sentiment in consumer-facing segments, while infrastructure-linked sectors are banking on continued public spending to sustain order flows.

Still, the uneven pace of recovery across sub-sectors calls for targeted interventions. While machine tools and automotive are poised for moderate to strong growth, chemicals and textiles remain cautious, citing cost pressures and limited export visibility. The survey also highlights the need for improved labour skilling, with around 20 per cent of respondents indicating a shortage of skilled workforce in their respective sectors.

India’s manufacturing sector is preparing to invest and expand, but the momentum is tempered by structural and external constraints. The next six months will be critical in determining whether this intent translates into tangible capacity additions, and whether policy and infrastructure can keep pace with industry’s evolving needs.

Microalgae-powered air purification device tackles indoor CO₂ with scientific precision

Mumbai: In a city where air quality concerns often focus on traffic and industrial emissions, a 17-year-old student from Mumbai has turned attention to a quieter but equally pressing issue – indoor carbon dioxide levels. Hridank Garodia, a Grade 11 student at Dhirubhai Ambani International School, has developed Aerovive, a microalgae-based air purification device that directly addresses elevated carbon dioxide (CO₂) concentrations in enclosed spaces.

Garodia’s interest in the problem began with a simple observation: students struggled to concentrate during exams. His research revealed that CO₂ levels in classrooms frequently exceeded 1200–1500 parts per million (ppm), well above the threshold of around 945 ppm where cognitive performance begins to decline. The issue extended beyond schools to offices, clinics, gyms and homes – environments where people spend the majority of their time.

Aerovive offers a biologically driven solution. The compact unit uses living microalgae to absorb carbon dioxide and release oxygen, effectively replicating the air-cleaning capacity of approximately 40 houseplants. Unlike conventional air purifiers that rely on filters or chemical treatments, Aerovive leverages photosynthetic organisms to perform continuous gas exchange. The device has undergone three rounds of prototyping and field testing, supported by researchers at IIT Bombay, and has demonstrated measurable reductions in indoor CO₂ levels.

Hridank Garodia

“We obsess over outdoor pollution, but spend 90% of our time indoors breathing air that’s often worse. Aerovive is designed to make homes, schools and offices healthier – so we can breathe better, think better and live better,” said Garodia.

The innovation has attracted attention from both scientific and commercial quarters. Aerovive was recognised at the IRIS National Science Fair and presented at the ICSEAT International Conference. It has also secured a ₹10 lakh Letter of Intent (LoI) for deployment in Mumbai’s largest office park, indicating early interest in scaling the technology for corporate environments.

Garodia’s work extends beyond the device itself. Through The Invisible Heroes Lab, he has developed a 15-session educational programme that introduces students to the unseen biological systems – algae, fungi and bacteria – that underpin environmental health. The initiative has reached over 1,000 students through workshops across Mumbai, with plans to engage hundreds more in the coming year.

The broader ambition is to integrate Aerovive into clinics, schools and corporate campuses, while expanding the educational outreach nationwide. Garodia’s approach combines scientific rigour with a focus on human wellness, positioning clean indoor air not just as a technical challenge but as a public health priority.

His efforts have earned recognition from institutions including National Geographic, where he received the Cultivating Empathy for Earth Award, and the World Science Scholars programme under physicist Brian Greene. Mentorship from experts at IIT Bombay and Harvard has helped refine both the technical and educational dimensions of his work.

Aerovive’s uniqueness lies in its biological foundation. While air purification technologies typically rely on mechanical filtration or ionisation, this device uses a living system to perform gas exchange – a method that is both energy-efficient and scalable. Its design reflects a growing interest in biomimicry and nature-based solutions to environmental challenges, particularly in urban settings where space and energy constraints limit traditional approaches.

Garodia’s innovation arrives at a time when indoor air quality is gaining renewed attention, especially in the context of post-pandemic health and workplace design. By focusing on CO₂, a gas often overlooked in indoor pollution discussions, Aerovive addresses a subtle but significant factor affecting cognitive function and overall wellbeing.

As the device moves toward broader deployment, its success will depend on sustained performance, ease of maintenance and cost-effectiveness. But its early reception suggests that biologically inspired solutions may have a growing role in how cities manage air quality – not just outdoors, but in the spaces where people live, learn and work.

NBFCs expand gold loan portfolios despite losing market share

Mumbai: Non-Banking Financial Companies (NBFCs) are poised to record robust growth in their gold loan portfolios in the current financial year, even as their share of the organised market continues to shrink. According to a recent report by ICRA, NBFCs’ assets under management (AUM) in the gold loan segment are expected to grow by 30–35 per cent in FY2026, driven largely by elevated gold prices and a slowdown in unsecured lending.

The organised gold loan market is projected to reach ₹15 trillion by March 2026, a year ahead of previous estimates. This acceleration is attributed to the sustained rise in gold prices, which has boosted the value of collateral and increased demand for loans secured by gold jewellery. Despite this expansion, NBFCs’ share of the market has declined steadily, falling to 18 per cent as of March 2025 from 22 per cent in March 2021. Banks now dominate the segment, accounting for 82 per cent of total organised gold loan AUM.

ICRA notes that NBFCs have maintained strong growth momentum, with their gold loan AUM reaching approximately ₹2.4 trillion by June 2025, a year-on-year increase of around 41%. However, this growth has not translated into a larger market share, as banks have expanded more aggressively. Over the six-year period from FY2020 to FY2025, bank gold loan AUM grew at a compound annual rate of 26 per cent, compared to 20 per cent for NBFCs.

The concentration of gold loan assets among NBFCs remains high, though it is gradually dispersing. The top four NBFCs accounted for 81 per cent of the segment’s AUM in March 2025, down from 90 per cent in March 2022. This suggests that smaller players are beginning to gain ground, albeit slowly.

One notable trend is the divergence between the growth in AUM and the actual quantity of gold held as collateral. Between FY2020 and FY2025, the tonnage of gold held by NBFCs grew at a modest 1.7 per cent compound annual rate, while AUM rose by 20 per cent. In some cases, NBFCs reported a decline in gold holdings even as their loan books expanded. This discrepancy is partly explained by the increase in average loan ticket sizes, which more than doubled during the same period.

Branch expansion has also been subdued, with the number of NBFC branches growing at a compound annual rate of just 3.3 per cent from FY2020 to FY2025. Despite this, NBFCs have managed to sustain healthy lending spreads, supported by operational efficiencies and moderate credit losses. These factors have helped preserve net earnings, even as competition intensifies.

The competitive landscape is shifting, with banks reclassifying gold-backed loans from agricultural to retail categories. This reclassification has led to a rise in retail gold loans, which accounted for 18 per cent of total gold loans in March 2025, up from 11 per cent a year earlier. At the same time, the share of agricultural and other gold-backed loans declined to 63 per cent

ICRA cautions that NBFCs face increasing pressure on yields due to the entry of new players and the continued expansion of banks in the gold loan segment. To remain competitive, NBFCs will need to further improve operational efficiency and build buffers against margin compression.

While NBFCs are unlikely to regain their former dominance in the gold loan market, their projected growth in FY2026 underscores their resilience and adaptability. The segment remains a key area of focus for these institutions, particularly as they seek alternatives to unsecured lending in a high-risk environment.

Startup accelerator platform WaveX expands national footprint with seven new incubators

Mumbai: WaveX, the startup accelerator platform under India’s Ministry of Information & Broadcasting, has announced the launch of seven new incubation centres aimed at supporting early-stage ventures in the media, entertainment and AVGC-XR sectors. The move marks a significant expansion of the government’s WAVES initiative, which seeks to foster innovation in animation, visual effects, gaming, comics and extended reality technologies.

The new centres will be located at five campuses of the Indian Institute of Mass Communication (IIMC) — Delhi, Jammu, Dhenkanal, Kottayam and Amravati — as well as at the Film and Television Institute of India (FTII) in Pune and the Satyajit Ray Film and Television Institute (SRFTI) in Kolkata. These facilities join the existing flagship incubator at the Indian Institute of Creative Technologies (IICT) in Mumbai, creating a nationwide network of support for creative technology startups.

Each centre will offer access to advanced infrastructure for film production, game development, editing and testing. Startups will be able to use high-end equipment such as 8K cameras, Dolby Atmos preview theatres, virtual production stages, photogrammetry systems and VR testing kits. The IICT Mumbai facility, which serves as the model for the new centres, also includes professional sound and colour-mix theatres, 4K HDR edit suites and the latest gaming consoles. These resources are designed to help startups develop and validate content to global standards.

In addition to physical infrastructure, WaveX will provide structured mentorship, industry and government connections, and opportunities for international exposure. Startups will be eligible to participate in events such as VivaTech in Paris and the Game Developers Conference in the United States. The programme also includes access to cloud services, AI compute resources, and sandbox testing environments across various media formats including OTT, VFX, VR and publishing.

The incubation model operates in two phases. The active phase focuses on business modelling, product development, branding and fundraising, while the passive phase offers lighter mentorship and global showcasing opportunities. Selected startups may also be prioritised for projects outsourced by media units under the Ministry, including Doordarshan, All India Radio and the Press Information Bureau.

Applications for the first cohort are now open, with 15 startups to be selected at each location. A monthly fee of ₹8,500 plus GST will apply. Preference will be given to ventures in the Media-Entertainment and AVGC-XR sectors. Startups can apply via the WaveX portal by selecting their preferred incubation centre.

WaveX’s expansion reflects a broader effort to build a robust ecosystem for creative technologies in India. By partnering with institutions such as IITs and T-Hub, the initiative aims to provide startups with access to wider innovation networks and learning opportunities. The programme’s emphasis on early-stage support, including ventures that are still in conceptual or 'unreal' stages, sets it apart from traditional incubators that typically require market-ready products.

The announcement comes at a time when India’s AVGC-XR sector is gaining momentum, driven by rising demand for immersive content and digital entertainment. With the launch of these new centres, WaveX is positioning itself as a key enabler of growth in this space, offering startups the tools and guidance needed to compete on a global stage.

GST cut on room air-conditioners will ease prices but new star label implementation adds cost

Mumbai: While the recent reduction in goods and services tax (GST) on room air-conditioners (RACs) under two tonnes is expected to lower retail prices, the upcoming implementation of the new Star Label from January 2026 will likely push them back up. According to ICRA, the GST rate cut from 28% to 18%, effective 22 September 2025, could reduce prices by ₹2,000–₹3,000 per unit. However, the new energy efficiency standards under the revised Star Label are projected to increase prices by ₹500–₹2,500 per unit, depending on the model.

The timing of these regulatory changes is expected to influence consumer behaviour in the coming months. ICRA anticipates a wave of pre-buying in the third quarter of FY2026, as consumers seek to take advantage of lower prices before the new label takes effect. This may offer some relief to manufacturers, who are currently grappling with a sharp drop in demand and a significant build-up in inventory.

Sales volumes in the RAC industry are forecast to decline by 10–15% year-on-year in FY2026, falling to 11.0–11.5 million units from a record 12.5–13.0 million units in FY2025. The downturn has been attributed to unseasonal and above-average rainfall during the peak summer months of April to July 2025, particularly in North and Central India. The extended wet spell reduced the number of heatwave days, leading to a 15–20% drop in sales during that period.

As a result, channel inventory has doubled to around 2.5 million units as of July 2025, placing pressure on original equipment manufacturers (OEMs) to clear stock. A partial recovery is expected in the second half of FY2026, especially in Southern and Western regions, where forecasts point to a warmer summer in 2026.

The RAC industry is also preparing for broader regulatory changes beyond the Star Label. The phased implementation of the Quality Control Order (QCO) over the next 12 months will require compliance with Indian Standards and mandate the Bureau of Indian Standards (BIS) quality mark on products. This move is expected to increase indigenisation and reshape manufacturing strategies.

Currently, 65–70% of India’s RAC manufacturing capacity is held by OEMs, with the remaining 30–35% concentrated among contract manufacturers. Nearly 80% of total capacity is controlled by the top seven OEMs, while contract manufacturing is limited to three or four major players. To meet growing domestic demand and adapt to regulatory shifts, manufacturers have announced capital expenditure plans of ₹4,500–₹5,000 crore over the next two to three years. This investment is expected to increase total capacity by 40–50% from the current 24–26 million units.

The Government of India’s production-linked incentive (PLI) scheme for components manufacturing in the consumer durables sector is also playing a role in boosting localisation. ICRA estimates that indigenisation in the RAC industry will rise to 70–75% by FY2028, up from the current 50–60%, as companies pursue backward integration and respond to policy incentives.

Despite the short-term challenges posed by weather variability and regulatory transitions, the long-term outlook for the RAC industry remains positive. Rising temperatures, low household penetration, urbanisation and growing replacement demand for energy-efficient models continue to support structural growth.

India–UK IP pact backs startups, MSMEs and grassroots innovation

Mumbai: The Intellectual Property Rights (IPR) chapter of the India–UK Comprehensive Economic and Trade Agreement (CETA) is being positioned as a pragmatic framework that supports innovation while safeguarding public interest. At a seminar hosted by the Department for Promotion of Industry and Internal Trade (DPIIT) and the Department of Commerce in New Delhi, experts and industry representatives discussed the chapter’s implications for startups, micro, small and medium enterprises (MSMEs), and traditional producers.

According to officials, the IPR provisions in the agreement aim to modernise India’s IP regime without compromising its regulatory autonomy. The framework retains key flexibilities enshrined in the Doha Declaration, including those related to compulsory licensing and public health. Voluntary licensing remains the preferred industry practice, and concerns about harmonisation of patent processes were addressed as procedural rather than substantive changes.

One of the most tangible outcomes of the agreement is the enhanced protection for Indian Geographical Indications (GIs) in the UK market. This is expected to benefit producers of region-specific goods by boosting exports and strengthening India’s cultural branding abroad. Industry voices at the seminar noted that such recognition could be transformative for grassroots producers and small enterprises, many of whom rely on GI-linked products for their livelihoods.

The seminar, organised in collaboration with the Centre for Trade and Investment Law (CTIL), also served to clarify misconceptions surrounding the agreement. Speakers emphasised that the IPR chapter does not curtail India’s policy space but rather reinforces its ability to legislate in line with domestic priorities. The provisions reflect India’s existing legal framework and send a signal to global partners about its commitment to a balanced and forward-looking IP regime.

While the broader contours of the India–UK CETA are still under negotiation, the IPR chapter is being seen as a potential model for future trade agreements. It attempts to strike a balance between encouraging innovation and ensuring access, a dual objective that resonates with India’s developmental goals.

The discussions concluded with a consensus that the chapter offers regulatory rigour without rigidity, and flexibility without dilution. For India’s startup ecosystem, MSMEs and traditional producers, this could mean greater opportunities to scale and compete globally, backed by a legal framework that recognises their unique contributions.

Air India Group plans 20 daily flights from Navi Mumbai International Airport in the initial phase

Mumbai: The Air India Group has announced its intention to begin commercial flight operations from the new Navi Mumbai International Airport (NMIA) from the outset of its first phase. The group’s value carrier, Air India Express, will be a key partner in the airport’s initial operations, with plans to significantly expand its services in the coming years.

In the first phase of the airport’s launch, Air India Express is scheduled to operate 20 daily departures, equating to 40 Air Traffic Movements (ATMs), connecting 15 cities across India. This partnership is part of a broader strategy by the Air India Group to enhance both domestic and international connectivity and support India’s ambition to become the world’s third-largest air passenger market by 2030.

The airline group’s expansion plans extend beyond the initial launch. By mid-2026, it aims to scale up its operations to 55 daily departures – 110 ATMs – which will include up to five daily international flights from NMIA. The group further intends to increase this to 60 daily departures, or 120 ATMs, by Winter 2026, connecting passengers to a growing network of key domestic and global destinations.

Commenting on the development, Campbell Wilson, CEO and Managing Director of Air India said, “We look forward to commencing operations at Navi Mumbai International Airport, as Mumbai joins the league of world cities with more than one airport. We are happy to work with Adani Airports to build NMIA not only as a point that connects to the rest of India, but also as one of the country’s key global transit hubs for both – passengers and cargo – given its strategic geographical location.” 

Arun Bansal, CEO of Adani Airport Holdings, said that Air India Group’s ambitious expansion plans and global vision are perfectly aligned with Adani Airport’s aim of making NMIA a benchmark in global aviation. “The collaboration will redefine Mumbai’s connectivity landscape and strengthen India’s twin-airport strategy,” he said.

Air India Express’s planned presence at NMIA is expected to substantially boost connectivity for the Mumbai Metropolitan Region (MMR) and facilitate seamless international transits through the new airport. 

The Navi Mumbai International Airport is being developed in five phases. The initial launch phase is designed to accommodate 20 million passengers per annum (MPPA) and handle 0.5 million metric tons (MMT) of cargo. Once fully completed, the airport will have the capacity to serve 90 MPPA and handle 3.2 MMT of cargo annually.