Titan’s engineering arm looks to fill equipment gap as manufacturers seek China alternatives

U.S. tariffs, Europe’s shift away from China and India’s focus on semiconductors, solar power and batteries are creating opportunities for companies that can produce the equipment these industries need.

For TEAL, a Titan Company subsidiary with deep capabilities in automation and precision manufacturing, this convergence of global pressure points and domestic policy momentum is shaping its next phase of expansion.

“This is probably the best time for manufacturing in this country,” said Sridhar NP, managing director and CEO of TEAL. “Unfortunately it came years later than it should have, but it’s better than never. We’re seeing industries where the entire value chain comes together. I don’t know if this has ever happened anywhere else where the entire ecosystem was built within two years.”

Although India has stepped up investment in manufacturing capabilities in semiconductors, solar power, batteries and electronics manufacturing, most equipment used in these sectors continues to be imported from China. TEAL sees the opportunity to emerge as a domestic alternative in selected equipment categories where automation and precision engineering capabilities are applied.

However, the changes are not limited to the domestic market. Trump-era tariffs and broader geopolitical uncertainty have pushed companies globally to re-evaluate their supply chains and production footprints. While this expands opportunities for firms like TEAL, it also raises questions about how prolonged trade tensions could shape future investment and market access.

Global disruption as opportunity

TEAL operates two businesses. One designs and manufactures automation equipment for high-volume production. The other produces high-precision components primarily for global aerospace customers.

While the manufacturing services business, which focuses heavily on aerospace, has a significant impact in the US, the automation business has a very limited presence in this market. While the company is eager to eventually scale its automation business in North America, tariff uncertainty has caused the company to pause its expansion plans for now.

TEAL set up a subsidiary in the US a few years ago, but Sridhar admitted that the company did not do much about it. “North America is definitely an area to focus on, but we are waiting and watching how we want to do that (expanding in the US market),” he said. “On the automation front, we export almost nothing to the US, so that hasn’t been impacted, but it has impacted our North American strategy.”

Sridhar explained that aerospace manufacturing exports were not affected by the tariffs, largely due to long-term contracts and deep customer relationships. Approximately 95% of TEAL’s manufacturing services production is export-oriented, with the United States being a key market.

Europe, on the other hand, offers a different dynamic. Although industrial demand there may soften in the near term, structural factors are pushing European manufacturers to diversify their supply chains away from China and towards alternative partners. Defense and aerospace spending is expected to rise sharply in Europe, but capacity building domestically remains expensive.

This creates a natural pull towards India, says Nithin Chandra, partner at consultancy firm Kearney. “Europe will see a sharp increase in defense and aerospace spending, but creating capacity there is costly,” he said. “This naturally pushes sourcing towards Asia, and India is viewed much more favorably than China as a long-term partner.”

Sridhar added that even as the US and Europe try to move manufacturing closer to home, high labor costs in these regions make automation inevitable rather than optional. He said this paves the way for a different operating model for automation vendors, where proximity is important but full localization is not necessary.

“The model that really works in the software industry can also work for automation,” he said, referring to the offshore-on-premises approach. In this model, core design, engineering and equipment manufacturing can be done in India; the machines are shipped abroad and final commissioning and adjustments are carried out on site. “If you do this model well, it creates a very unique way we can create solutions,” he said.

India factor

However, it is the India opportunity that excites TEAL the most. The government is actively creating a policy framework to reduce import dependence and attract technology-driven manufacturing in the semiconductors, electronics and new energy sectors.

Roughly supported flagship India Semiconductor Mission ₹The incentive of ₹76,000 crore supports end-to-end semiconductor manufacturing, from design and manufacturing to packaging and testing, with financial support of up to 50% of the project cost for approved factories and associated infrastructure. Similar policy support has been extended to solar power generation and electronics manufacturing.

Industry also responded. Intel and Tata Group signed a memorandum of understanding to localize semiconductor manufacturing and advanced packaging in India; With Tata’s semiconductor projects totaling $14 billion, including a manufacturing facility and an OSAT facility.

In parallel, solar and battery manufacturers are investing upstream in cells, wafers and ingots, while electronics manufacturing services players are expanding local assembly and testing capacity, signaling a shift towards full-stack technology manufacturing in India.

India has seen booms in the manufacturing sector before, especially in the automotive sector. But Sridhar argues that the current cycle is fundamentally different in both pace and structure.

For example, the automotive industry developed slowly. India started by assembling vehicles using imported components. As volumes grew and revenues rose, suppliers followed and over the decades, India built a balanced ecosystem where engines, tires and systems were manufactured locally.

In semiconductors and solar energy, this progress is being compressed significantly. “In semiconductors, everything comes together,” Sridhar said. “From silicon ingots to wafers, fabs, packaging and final ICs (integrated circuits). Major investments are being made simultaneously across the entire value chain.” A similar transformation is seen in solar energy production, among other sectors.

“What hasn’t arrived is the equipment,” Sridhar said. “All equipment today comes from China, whether it’s semiconductor or solar.”

TEAL is not trying to be a manufacturer of basic semiconductor process tools or specialty chemistry. Sridhar said this would not be realistic. Instead, the company is targeting downstream and adjacent equipment where automation and precision engineering are most important.

This includes assembly automation, material handling, packaging equipment and discrete manufacturing systems for semiconductors, solar energy and electronics manufacturing services. The same logic applies to batteries, for which India has developed production capacity under production-linked incentives but the equipment and technology are largely imported.

This is a pragmatic strategy, according to Kearney’s Chandra. “Being a full-fledged equipment OEM in semiconductors is extremely difficult,” he said. “However, becoming a reliable component or subsystem supplier is a much more logical and scalable path, especially if achieved through partnerships.”

Two businesses, two growth paths

TEAL’s strategy is based on its twin businesses facing very different demand dynamics.

Its manufacturing services business is primarily focused on high-precision components for aerospace. The majority of output from this segment is export-oriented, supplying critical parts used in commercial aircraft systems such as engine starters, air management systems and thrust reversers.

This business has proven resilient even amid global disruptions. “My aerospace (and defense) customers haven’t stopped buying from us,” Sridhar said. “It’s a very sticky business. You don’t make short-term decisions in aviation because the consequences in the supply chain are very high.” Long qualification cycles and switching costs mean aviation supply chains tend to look beyond short-term tariff changes.

The automation business tells a different story. While last year was evenly split between domestic and export markets, the balance shifted decisively towards India. This year, approximately 70% of automation revenues are expected to be domestic, and the rest will come from exports.

“While international opportunities are also growing, we see a much bigger opportunity in India,” Sridhar said.

Competitive landscape and where TEAL fits

TEAL operates in an industrial automation market dominated by multinational players. Companies like Siemens India, ABB India, Schneider Electric India, Rockwell Automation India and Honeywell Automation India provide standardized platforms across industries. Siemens AG operates worldwide approximately EUR 78.9 billion (approx. ₹We underlined the greatness of these players by generating revenues of 7 trillion in FY 2025.

In India, subsidiaries of these companies have built large businesses on corporate relationships and large portfolios. For example, Honeywell Automation India reported its total revenue as follows: ₹4,189.6 crore in FY25.

Besides these, there is a smaller group of Indian experts, including robotics firms such as Addverb Technologies and GreyOrange, and aerospace component suppliers such as Aequs, Dynamatic Technologies and Sigma Advanced Systems.

TEAL is among these categories. FY25 revenue approx. ₹860 crore among Indian engineering majors who are much smaller but more scaled than multinational leaders. Automation accounts for just over 60% of revenue, with manufacturing services accounting for the rest.

Both manufacturing services and automation equipment businesses will continue to see investment, especially in factories and new technologies, Sridhar said. The company also plans to establish facilities in East Asia and invest in capabilities such as lasers, vision systems, robotics, high-speed automation and new energy applications, primarily batteries, to better serve electronic equipment customers in the region.

Chandra believes TEAL is well positioned to capitalize on emerging local and global opportunities. “This is a long-term opportunity,” he said. “If the semiconductors, solar, batteries, and aerospace industries scale as expected, suppliers with deep engineering capabilities will converge within a decade or more.”