Resilient Performance and Optimistic Outlook for VDMA Member Companies in India

The latest VDMA Business Climate Survey for India, conducted between 13 and 31 October 2025 among 107 member companies, confirms that India remains a strong pillar of growth for German and European machinery & equipment manufacturers. Despite global headwinds such as US tariffs and weak European demand, VDMA member companies in India show resilience, with a slightly improved business situation and continued optimism for the coming months.

Rajesh Nath, Managing Director, VDMA India, says: ‘With the recent quarter GDP growth of 8.2%, the highest in 6 quarters, India has shown resilience despite of the global uncertainties and the tariff wars. The recent GST simplification and an above average monsoon with progressive government policies have contributed to the growing attractiveness of the Indian market and this is substantiated by the positive response from the VDMA members reposing their confidence in India’s growth story’
Anke Uhlig, VDMA Economics and Statistics, Team Leader Research & Analytics, says: ‘The results of the survey show once again that VDMA members assess the business outlook in individual countries very differently. With stable business development in these challenging times, India is a ray of hope for them.

Current Business Situation and Orders

The current business situation is assessed positively by most respondents: 29 percent rate it as good, 63 percent as satisfactory, and only 8 percent as poor. This represents a modest improvement compared to the previous half-year. Capacity utilisation has strengthened, with 22 percent reporting above-normal levels, 61 percent normal, and 17 percent below normal.

Order books have improved significantly. While 33 percent of companies report an above-normal stock of orders, 54 percent consider it normal and 13 percent below normal. Expectations for incoming orders over the next three months remain upbeat: 64 percent anticipate an increase, 34 percent expect stability, and only 2 percent foresee a decline. Domestic demand continues to be the main driver, while export orders show mixed signals due to global uncertainties.

Outlook: Confidence in Continued Growth

The outlook for the next six months remains positive. A majority of 55 percent expect their business situation to improve, 41 percent foresee stability, and only 4 percent anticipate deterioration. Employment plans reflect this confidence: 48 percent intend to increase their workforce, 49 percent will maintain current levels, and just 3 percent plan reductions.

Nominal revenue growth projections are encouraging. For the current fiscal year 2025–26, the average expected growth is around 9 percent, while for the next fiscal year 2026–27, companies anticipate an average increase of approximately 10 percent. These figures underline the strong medium-term prospects for the Indian market.

Sub-sector Performance and Challenges

The survey reveals a differentiated picture across sub-sectors. Robotics and Automation report above-average sentiment, while Machine Tools and Manufacturing Systems face more subdued conditions due to global competitive pressures. Electrical Automation sector faces a slight decrease in business sentiment compared to the last survey, whereas Fluid Power shows above-average sentiment relative to the total machinery sector.

Impediments to business remain relatively minor. The most frequently cited challenges include shortages of skilled labour, lack of orders and local content requirements, while the impact of lack of orders is limited compared to previous years. Financing constraints and technical capacity bottlenecks have eased, strengthening the positive environment for investment and expansion. However, the new question on the impact of tariffs imposed by the USA reveals that 49 percent of respondents foresee a negative effect on their export business, 51 percent expect no significant impact. This underscores the importance of India’s domestic market as a stabilising factor.

Strategic Implications

India’s machinery & equipment sector continues to offer strong growth prospects and a stable operating environment for VDMA member companies. The combination of improving capacity utilisation, robust domestic demand, and sustained investment intentions positions India as a key market for long-term engagement. While global uncertainties persist, the Indian market’s resilience and dynamism provide a solid foundation for strategic planning and expansion.