June 07, 2026

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AN AUSTERE SUMMER?

A LITTLE OVER two months into the West Asia war, Prime Minister Narendra Modi's call for consumption cuts made everyone sit up and take notice. Until then, it had been largely business as usual for most, although there had been some impact from the conflict in almost everyone's lives. Consumers were facing higher prices of most goods, barring petrol and diesel, while businesses were battling challenges in securing energy supplies and raw material imports as well as in sending out export cargoes.However, the Prime Minister's exhortation to cut down on the use of petrol and diesel as well as discretionary spending on gold, amongst other measures to save foreign exchange, raised larger concerns over the well-being of the economy and whether a fresh and perhaps, larger-than-anticipated, crisis was brewing. In the ensuing days, the government swung into action and took a handful of measures to curb forex outflows, which also coincided with the conclusion of assembly polls in five states.First, the Centre more than doubled the customs duty on precious metals, including gold silver and platinum, which was followed by state-owned oil marketing companies raising retail prices of petrol and diesel by `3 per litre each, followed by another 90 paise hike and then restricting silver imports through nominated agencies.Questions over the health of the economy and what's in store for consumers abound with worries over second round inflation, more measures to control balance of payments and slowing growth. After all, for much of the past few quarters of FY26, and right up to the presentation of the Union Budget on February 1 and ensuing weeks, it had been smooth sailing for the Indian economy, which was seen to go through a so-called Goldilocks phase of high growth and low inflation.The economy, through nimble policy moves and strong internal demand, had brushed off the potential hit from the 50% tariffs imposed by US President Donald Trump and had done better than expected with an estimated growth of 7.6% last fiscal and a pickup in private consumption on the back of cuts in income tax and goods and services tax (GST) rates.But over the past two-and-a-half months, this picture started to change with questions emanating now over how long the economy can remain resilient to external and domestic challenges.Adding to the external volatilities, the monsoons are also seen to be below average this year, leading to at least some worries over how it would impact crop production and prices and the rural sector, which is a significant source of private consumption.

TECHNOLOGY IN MOTION

LAST MAY, WHEN German auto component maker Schaeffler inaugurated its fifth plant in the country at Shoolagiri, Tamil Nadu, it was an important step towards consolidating its long-term India strategy.The facility expands its manufacturing presence in India and is part of the ongoing investments of 500 million (about `5,500 crore) that the company--which makes bearings and other engine and transmission components for automobile and industrial sectors--has earmarked for the next five years.Though present in India since 1962 through FAG Bearings, in 2018, the company created a unified iden| tity under the Schaeffler brand to tap into the growing India market.The bet seems to be paying off. In 2018, Schaeffler had a turnover of about `4,500 crore and four manufacturing plants. By 2025, combined revenues had more than doubled to `9,395 crore. Profit was `1,196 crore, up 185% since 2018. Schaeffler India's market capitalisation has jumped more than 450% over the period to more than `63,000 crore. The stock has risen 4% so far this calendar, trading at `3,980 a piece on May 18, compared with a 5% decline in the Nifty 500 index.The company has six manu- facturing plants now and three research and development (R&D) facilities as it evolves from a component maker to having a strong digital and engineering R&D ecosystem.The target is to cash in on the burgeoning auto components market here. According to the Automotive Component Manufacturers Association of India, the domestic market has grown at a compound annual growth rate (CAGR) of 14% over the past five years to $80 billion and is projected to hit $200 billion by 2030. Likewise, the bearings industry, pegged at $5.2 billion in 2025, is expected to grow at a CAGR of 9.6% to more than double to $12 billion by 2034.Beyond the numbers, there is a larger strategic shift that's underway. The company is moving to newer technology areas, from providing purely mechanical solutions to electronics and mechatronics combined with software. "We're graduating towards a sub-system player and into a system-level player," says Harsha Kadam, Managing Director and CEO of Schaeffler India.Schaeffler is adopting a lot of developments being powered from India globally. The 1,600-strong R&D team, split across Pune and Bengaluru, is working on cuttingedge research in areas like hydrogen fuel cells, electrolysers and humanoids, which Kadam says might not find use immediately in India, but can be deployed elsewhere.INVESTMENT FOCUS India's strategic importance is reflected in the scale of the invest- ments. Over the last five years, the company has, on average, invested `1,000 crore annually towards ramping up operations. The aim is to increase its manufacturing footprint and localise the product portfolio while meeting the growing demand in India. This year, it will invest `400-500 crore.The plant in Tamil Nadu caters primarily to the auto industry, which accounts for about a third of the company's turnover. It is meant to serve as a hub for production and