Insight

Here Abhijat Sanghvi, president of the Fastener Association of India (FAI), discusses the latest developments within the Indian economy and fastener market; the opportunities and challenges companies face; as well as how the FAI looks to support its members.

How is the Indian economy currently performing and how has it performed over the last 2 or 3 years? What are the prospects for the future?

“The Indian economy is estimated to grow at 7.3% for the financial year 2024-25. This would be the third year in the row when the GDP would be more than 7%. Many global agencies have also revised India’s growth projection upwards. Three successive years of high growth shows the resilience of the Indian economy and the bedrock of high growth is strong private consumption. Investment is consolidating in the economy as high public CapEx crowds in private investment, which is beginning to set-up additional plants and acquire new machinery to address rising capacity utilisation. In the last few years, India’s GDP grew even as there was an impact of several major reforms, such as bankruptcy law, GST implementation, Real Estate Regulation Act (RERA) and demonetisation, which paid off in the long run.

From the 9^th largest economy a decade back, India has now become the 5^th largest economy with a nominal GDP of US$3.4 trillion. India’s GDP is likely to touch US$5 trillion over the next four years and will overtake Japan and Germany to become the third largest economy by 2027. Potentially, India stands to be nearly a US$10 trillion market by 2030.”

How are Indian fastener manufacturers performing? What developments have happened within the Indian fastener market? 

“Fasteners are a product range that is consumed across a wide spectrum of industries. Hence, the performance of fastener manufacturers directly correlates with demand from industries such as automotive, construction, aerospace, electronics, general engineering and many others. Economic factors, such as GDP growth, infrastructure projects, and consumer spending, directly affect demand for fasteners. With the positive global outlook for India and it’s growth story, there is continuous upward growth expected in fastener consumption domestically. Globally, with growing resistance in the west to Chinese fasteners, and the unpredictability around the geopolitical situation relating to Taiwan and China, India stands to gain with many more international buyers seriously considering or having already commenced sourcing from India. This means the business environment around the Indian fastener industry is extremely bullish on both the domestic and international front.”

What opportunities and challenges do you believe lie ahead for the remainder of 2024/25 for Indian fastener manufacturers? 

“Mandatory certification of all Indian fastener manufacturers by the Bureau of Indian Standards (BIS) has been welcomed by the industry. However, the process is cumbersome, expensive and time-consuming. FAI has explained the limitations of the industry to comply with these norms to the government, as we are hopeful the process will be simplified, whilst at the same time not diluting the quality norms. 

Minimum Import Price (MIP) for most fasteners has also been set, which offsets any dumping of fasteners and is a good protective measure for the industry to have a level playing field in the domestic markets. Opportunities for exports will also be growing continuously, having already mentioned the possibility of India becoming a focus country given the tensions between China and Taiwan. 

A big challenge for a lot of Indian fastener manufacturers is in upgrading technologies and capacities regularly – so that they are in sync with the global demand – although many Indian companies have undoubtedly already risen to the task. “

What are the advantages to the business of becoming part of FAI? How does the FAI work with members?

“The FAI is the only pan India industry association that has succeeded progressively in bringing cohesiveness to the Indian fastener industry. We are making bigger strides each year with more members embracing the vision that FAI has for the industry.  Conducting industry seminars and networking meetings; tying up with government agencies for Indian pavilions at international trade shows; publication and circulation of India’s only fastener magazine ‘Fastener India’; promoting platforms for business opportunities; dispute redressal among member companies; participation in all major fastener trade shows – both domestic and international; representation of the industry with government ministries and agencies for critical issues – a current case in point being Bureau of Indian Standards (BIS) certification for all manufacturers as a mandatory norm for which industry concerns are addressed, etc. We encourage all fastener companies from India to be a part of the association where the advantages of being a part of the Indian fastener community under FAI are invaluable.”