The Iran war impact on Make in India

Good morning!

India’s manufacturing story lost some steam in March. The HSBC Purchasing Managers Index (PMI) slipped from 56.9 to 53.9—its weakest since June 2022—signalling slower but still positive growth.

What’s behind the dip? A mix of softer demand and rising uncertainty. The Iran war is beginning to ripple through supply chains, pushing up input costs for metals, chemicals and fuel. Companies, however, aren’t fully passing this on yet, keeping price hikes modest.

New orders and output, the backbone of factory activity, both slowed sharply, but there are pockets of resilience. Export demand held up, with stronger orders from Europe and Asia, and firms continued hiring at a steady pace.

The bigger worry is uncertainty. While markets expect a short conflict, businesses are turning cautious, adjusting expectations and spending. If cost pressures persist, that gap between optimism and ground reality could start showing up more sharply in growth and inflation. Read more.

In today’s edition of Top of the Morning:

• War opens window for India’s space startups
• Maruti’s EV overdrive faces starting trouble
• VIP Industries: Hard luggage, soft sales

THE MAIN STUFF

War opens a window for India’s space startups: India’s space startups may have found an unexpected tailwind. The Iran war is driving demand for satellite-based surveillance, creating a “just right” moment for firms building imaging and data capabilities.

Startups like Pixxel, Digantara and GalaxEye Space are already seeing inbound interest and signing deals, especially from West Asia, where many countries lack their own satellite systems.

The opportunity is sizeable, with projections pegging India’s space surveillance market at $8 billion by 2033. But scale remains a constraint, with only a handful of satellites operational. Geopolitics could also complicate growth, as firms navigating US partnerships may face restrictions on who they can sell data to. Read more.

Maruti’s EV debut hits early roadblocks: Maruti Suzuki’s long-awaited EV entry has stumbled out of the gate. The company fell well short of its 70,000-unit production target in FY26, exporting 25,000 units and selling just 1,400 domestically.

A mix of delays and disruptions hurt momentum. The domestic launch was pushed back, rare-earth magnet shortages slowed production, and a global EV slowdown weighed on demand.

While rivals like Tata Motors and Mahindra scaled up, Maruti stayed cautious, capping output to avoid long waiting periods. The company is now betting on FY27, when a larger production line comes online. For now, its EV journey mirrors the broader industry: strong long-term potential, but a bumpy start. Read more.

A ‘leadership moment’ for India in a volatile world: In a world shaped by repeated shocks, from covid to Iran war, India has a rare opening to lead, says McKinsey & Co.’s global managing partner Bob Sternfels.

As global systems shift from efficiency to resilience, companies are rethinking supply chains and turning to India as a strategic hub.The opportunity spans new growth engines like AI, data centres and clean energy. McKinsey estimates these “arenas” could add $7 trillion to India’s economy by 2040.

The playbook is clear: sustain capex, boost consumption and build energy resilience. Trade isn’t shrinking, it’s rerouting. If India sustains 6.5-8% growth, it could move decisively into a higher middle-income bracket over the next two decades. Read more.

Hard luggage, soft sales: When travel froze in 2020, both VIP Industries Ltd. and Safari Industries Ltd. saw revenues collapse. But the recovery told two very different stories. As travel boomed again, Safari raced ahead, overtaking VIP in revenue and market value, while the latter slipped into losses and struggled to keep pace.

The shift reflects a deeper change in India’s luggage market. Consumers are moving from basic, shared suitcases to premium, hard-shell, design-led luggage bought online. New-age brands have tapped this aspiration, intensifying competition for the incumbents.

VIP, weighed down by inventory and debt, is trying to pivot back to premium. Safari, though ahead, still depends heavily on mass products and must upgrade to sustain momentum. With startups circling and consumer tastes evolving fast, the battle for India’s suitcase is just getting started. Read more.

A new startup has a new playbook for 10-minute food delivery: After multiple failed attempts by Zomato and Swiggy Ltd., the 10-minute food delivery dream is being rewritten. Their experiments struggled with high delivery costs, low order values, and inconsistent demand, making profits elusive. Now, startup Swish is taking a different route.

By owning the entire chain, from cooking to delivery, and limiting operations to tight local zones, Swish aims to improve speed, quality, and margins. Fresh funding suggests investors still see potential in ultra-fast delivery, but with stricter execution. The big question remains: can control and discipline finally make the model profitable? Read more.

NEWS IN NUMBERS

• $𝟣𝟪 𝗆𝗂𝗅𝗅𝗂𝗈𝗇: 𝖳𝗁𝖾 𝗉𝗋𝗂𝖼𝖾 𝖿𝖾𝗍𝖼𝗁𝖾𝖽 𝖻𝗒 𝖱𝖺𝗃𝖺 𝖱𝖺𝗏𝗂 𝖵𝖺𝗋𝗆𝖺’𝗌 𝖸𝖺𝗌𝗁𝗈𝖽𝖺 𝖺𝗇𝖽 𝖪𝗋𝗂𝗌𝗁𝗇𝖺 𝖺𝗍 𝖲𝖺𝖿𝖿𝗋𝗈𝗇𝖺𝗋𝗍’𝗌 𝖲𝗉𝗋𝗂𝗇𝗀 𝖠𝗎𝖼𝗍𝗂𝗈𝗇𝗌 𝗂𝗇 𝖬𝗎𝗆𝖻𝖺𝗂, 𝗌𝗎𝗋𝗉𝖺𝗌𝗌𝗂𝗇𝗀 𝗍𝗁𝖾 𝗉𝗋𝖾𝗏𝗂𝗈𝗎𝗌 $𝟣𝟥.𝟩𝟧 𝗆𝗂𝗅𝗅𝗂𝗈𝗇 𝗋𝖾𝖼𝗈𝗋𝖽 𝖿𝗈𝗋 𝖬.𝖥. 𝖧𝗎𝗌𝖺𝗂𝗇’𝗌 𝖦𝗋𝖺𝗆 𝖸𝖺𝗍𝗋𝖺.
• 𝟦𝟣: 𝖳𝗁𝖾 𝗇𝗎𝗆𝖻𝖾𝗋 𝗈𝖿 𝗄𝖾𝗒 𝗉𝖾𝗍𝗋𝗈𝖼𝗁𝖾𝗆𝗂𝖼𝖺𝗅 𝗂𝗍𝖾𝗆𝗌 𝗈𝗇 𝗐𝗁𝗂𝖼𝗁 𝗍𝗁𝖾 𝗀𝗈𝗏𝖾𝗋𝗇𝗆𝖾𝗇𝗍 𝗁𝖺𝗌 𝗋𝖾𝗆𝗈𝗏𝖾𝖽 𝖼𝗎𝗌𝗍𝗈𝗆𝗌 𝖽𝗎𝗍𝗒 𝗎𝗇𝗍𝗂𝗅 𝟥𝟢 𝖩𝗎𝗇𝖾 𝟤𝟢𝟤𝟨 𝗍𝗈 𝗌𝗍𝖺𝖻𝗂𝗅𝗂𝗌𝖾 𝗌𝗎𝗉𝗉𝗅𝗂𝖾𝗌 𝖺𝗇𝖽 𝗅𝗈𝗐𝖾𝗋 𝖼𝗈𝗌𝗍𝗌 𝖿𝗈𝗋 𝖽𝗈𝗆𝖾𝗌𝗍𝗂𝖼 𝗂𝗇𝖽𝗎𝗌𝗍𝗋𝗂𝖾𝗌.
• ₹𝟫𝟩𝟣 𝖼𝗋𝗈𝗋𝖾: 𝖳𝗁𝖾 𝗍𝗈𝗍𝖺𝗅 𝗋𝖾𝗏𝖾𝗇𝗎𝖾 𝖿𝗋𝗈𝗆 𝗈𝗉𝖾𝗋𝖺𝗍𝗂𝗈𝗇𝗌 𝗋𝖾𝗉𝗈𝗋𝗍𝖾𝖽 𝖻𝗒 𝖵-𝖬𝖺𝗋𝗍 𝖱𝖾𝗍𝖺𝗂𝗅 𝗂𝗇 𝖰𝟦 𝖥𝖸𝟤𝟨, 𝗎𝗉 𝟤𝟦% 𝗒𝖾𝖺𝗋-𝗈𝗇-𝗒𝖾𝖺𝗋 𝖿𝗋𝗈𝗆 ₹𝟩𝟪𝟢 𝖼𝗋𝗈𝗋𝖾 𝗂𝗇 𝗍𝗁𝖾 𝗌𝖺𝗆𝖾 𝗊𝗎𝖺𝗋𝗍𝖾𝗋 𝗅𝖺𝗌𝗍 𝗒𝖾𝖺𝗋.
• 𝟧𝟥.𝟫: 𝖳𝗁𝖾 𝖧𝖲𝖡𝖢 𝖨𝗇𝖽𝗂𝖺 𝖬𝖺𝗇𝗎𝖿𝖺𝖼𝗍𝗎𝗋𝗂𝗇𝗀 𝖯𝖬𝖨 𝗋𝖾𝖺𝖽𝗂𝗇𝗀 𝖿𝗈𝗋 𝖬𝖺𝗋𝖼𝗁 𝟤𝟢𝟤𝟨, 𝗂𝗍𝗌 𝗐𝖾𝖺𝗄𝖾𝗌𝗍 𝗅𝖾𝗏𝖾𝗅 𝗌𝗂𝗇𝖼𝖾 𝖩𝗎𝗇𝖾 𝟤𝟢𝟤𝟤, 𝖻𝗎𝗍 𝗌𝗍𝗂𝗅𝗅 𝗌𝗂𝗀𝗇𝖺𝗅𝗅𝗂𝗇𝗀 𝖾𝗑𝗉𝖺𝗇𝗌𝗂𝗈𝗇 𝗂𝗇 𝖿𝖺𝖼𝗍𝗈𝗋𝗒 𝖺𝖼𝗍𝗂𝗏𝗂𝗍𝗒.
• ₹𝟤𝟫.𝟧𝟥 𝗍𝗋𝗂𝗅𝗅𝗂𝗈𝗇: 𝖳𝗁𝖾 𝗏𝖺𝗅𝗎𝖾 𝗈𝖿 𝖴𝖯𝖨 𝗍𝗋𝖺𝗇𝗌𝖺𝖼𝗍𝗂𝗈𝗇𝗌 𝗉𝗋𝗈𝖼𝖾𝗌𝗌𝖾𝖽 𝗂𝗇 𝖬𝖺𝗋𝖼𝗁 𝟤𝟢𝟤𝟨, 𝗎𝗉 𝟣𝟫% 𝗒𝖾𝖺𝗋-𝗈𝗇-𝗒𝖾𝖺𝗋, 𝖽𝗋𝗂𝗏𝖾𝗇 𝖻𝗒 𝖿𝖾𝗌𝗍𝗂𝗏𝖾 𝖺𝗇𝖽 𝖿𝗂𝗇𝖺𝗇𝖼𝗂𝖺𝗅 𝗒𝖾𝖺𝗋-𝖾𝗇𝖽 𝖺𝖼𝗍𝗂𝗏𝗂𝗍𝗒.
• 𝟧𝟢𝟢 𝖬𝖳: 𝖳𝗁𝖾 𝗏𝗈𝗅𝗎𝗆𝖾 𝗈𝖿 𝖼𝖺𝗋𝗀𝗈 𝗁𝖺𝗇𝖽𝗅𝖾𝖽 𝖻𝗒 𝖠𝖽𝖺𝗇𝗂 𝖯𝗈𝗋𝗍𝗌 𝖺𝗇𝖽 𝖲𝗉𝖾𝖼𝗂𝖺𝗅 𝖤𝖼𝗈𝗇𝗈𝗆𝗂𝖼 𝖹𝗈𝗇𝖾 𝗂𝗇 𝖥𝖸𝟤𝟨, 𝖾𝗏𝖾𝗇 𝖺𝗌 𝗂𝗍 𝗍𝖺𝗋𝗀𝖾𝗍𝗌 𝖺 𝖼𝖺𝗋𝗀𝗈 𝗏𝗈𝗅𝗎𝗆𝖾 𝗈𝖿 𝟣 𝖻𝗂𝗅𝗅𝗂𝗈𝗇 𝗍𝗈𝗇𝗇𝖾𝗌 𝖻𝗒 𝟤𝟢𝟥𝟢.
• 𝟣,𝟢𝟢𝟢 𝗍𝗈𝗇𝗇𝖾𝗌: 𝖳𝗁𝖾 𝗊𝗎𝖺𝗇𝗍𝗂𝗍𝗒 𝗈𝖿 𝗋𝗂𝖼𝖾 𝖨𝗇𝖽𝗂𝖺 𝗁𝖺𝗌 𝗌𝖾𝗇𝗍 𝗍𝗈 𝖡𝗎𝗋𝗄𝗂𝗇𝖺 𝖥𝖺𝗌𝗈 𝖺𝗌 𝗁𝗎𝗆𝖺𝗇𝗂𝗍𝖺𝗋𝗂𝖺𝗇 𝖺𝗌𝗌𝗂𝗌𝗍𝖺𝗇𝖼𝖾 𝗍𝗈 𝗌𝗎𝗉𝗉𝗈𝗋𝗍 𝖿𝗈𝗈𝖽 𝗌𝖾𝖼𝗎𝗋𝗂𝗍𝗒 𝖿𝗈𝗋 𝗏𝗎𝗅𝗇𝖾𝗋𝖺𝖻𝗅𝖾 𝖺𝗇𝖽 𝖽𝗂𝗌𝗉𝗅𝖺𝖼𝖾𝖽 𝖼𝗈𝗆𝗆𝗎𝗇𝗂𝗍𝗂𝖾𝗌.

AROUND THE WORLD

• Trump tries to sell Americans on war in Iran
• Oil prices are still high. Why that could actually help stocks and lower inflation.
• The islands that give Iran a stranglehold on the Strait of Hormuz
• Nike’s road to recovery in China is hitting new hurdles
• The investors moving early into Venezuela are bullish and ready for risk

CHART OF THE DAY

India gets 44% of its helium imports from Qatar—the world's second largest producer—leaving supplies vulnerable after attacks on key production hubs during the Iran wr, with AI chips and MRI services at risk.

LOUNGE RECOMMENDS

Tales of resilience and food from Kargil's kitchens: Yash Saxena's book ‘Stories from a Kargili Kitchen’ traces a community’s life and survival through its unique culinary traditions, including recipes of pasta soups, breads and sweet treats, fresh chutneys and warm beverages. Read more.

WHAT THE FACT

Birth of a publishing icon: Penguin Books was born in 1935 after founder Allen Lane, frustrated by the poor and pricey reading options at Exeter St Davids railway station, decided to create affordable, quality paperbacks. He settled on the name “Penguin” after a typist suggested the bird as “dignified but flippant”, and then sent young designer Edward Young to the London Zoo to sketch one. The result became one of publishing’s most iconic logos and helped launch a paperback revolution.

Written by Siddharth Sharma. Edited by Alokesh Bhattacharyya.