Top-line forecast
Across the Magnus supplier network we are pricing into 2026 with a blended index of +3.8% year-on-year on rupee-denominated quotes. Net of expected INR depreciation against USD (~2.5%), that lands at roughly +1.3% in dollar terms. Modest by recent standards, and significantly below China and Eastern Europe.
What's driving raw materials
Steel: flat to down 2%
Indian steel prices have been correcting since Q3 2025. Domestic capacity additions (Tata at Kalinganagar, JSW at Vijayanagar) are outrunning demand, and the Red Sea disruption that propped up scrap prices in 2024 has eased. Expect HRC at ₹52,000–₹55,000 per ton range.
Aluminum: up 4–6%
LME aluminum has been climbing on supply tightness from Russia sanctions and Chinese smelter slowdowns. Indian conversion costs are stable, but billet feed is imported and dollar-priced. Net impact on cast aluminum parts: +4–6%.
Copper: up 8–11%
The electrification thesis is real. EV and grid demand has structurally tightened copper. If your parts have copper content (brass, bronze, electrical connectors), price quarterly, not annually.
Polymers: down 3–5%
Oversupply in Asian petrochemicals continues. Polypropylene and ABS are buyer-favourable. The drop matches what we're already seeing in injection molding quotes.
Labour cost trajectory
Indian manufacturing wages rose 7.2% in 2025 — the fastest in five years. Driven by:
- State minimum wage revisions (Maharashtra, Gujarat, Tamil Nadu all stepped up)
- Tight skilled labour market in casting, machining, and tool-room trades
- Workers shifting from manufacturing to services (logistics, retail, gig)
We expect 6.0–6.5% wage growth in 2026. For labour-intensive parts (hand-finished forgings, assembly-heavy SKUs), this matters more than raw materials.
FX outlook
USD/INR ended 2025 at 84.6. Our forwarder and bank network consensus for 2026 closing: 86.5 – 87.5. That gives buyers a ~2.5% tailwind on dollar pricing.
But — and this is important — don't price the FX into 2026 quotes assuming linear depreciation. Volatility has been the rule, not the trend. Lock forward cover on shipments above $50,000 if you can't absorb a 4% adverse move.
If your 2026 budget assumed +5% across the board on India sourcing, you can hold the line. Reinvest the headroom in audit frequency or dual-sourcing — the next disruption will reward redundancy, not lowest cost.
Trade lane cost trends
| Lane | 2025 avg FCL 40' | 2026 forecast | Change |
|---|---|---|---|
| Nhava Sheva → Hamburg | $2,250 | $2,400 | +6.7% |
| Chennai → Los Angeles | $3,150 | $3,400 | +7.9% |
| Mundra → Rotterdam | $2,400 | $2,600 | +8.3% |
| Mundra → Dubai | $850 | $900 | +5.9% |
Ocean freight is the wildcard. Suez/Red Sea routing changes, demand recovery in Europe, and capacity discipline by major carriers all point up — but not dramatically.
Category-level summary
Pulling it together by sourcing category:
| Category | USD price change 2026 |
|---|---|
| Iron / steel castings | +1 to +2% |
| Aluminum die casting | +3 to +5% |
| CNC machined parts | +2 to +4% |
| Forgings (steel) | +1 to +3% |
| Sheet metal fabrications | +2 to +4% |
| Plastic injection | -2 to 0% |
| Assemblies (labour-heavy) | +4 to +6% |
Compare to China at +4–7%, Mexico at +5–8%. India remains the most cost-stable manufacturing geography heading into 2026.