India’s Auto Component Industry Projected to Reach USD 145 Billion by 2030, Exports Set to Triple: NITI Aayog
India’s Auto Component Industry Projected to Reach USD 145 Billion by 2030, Exports Set to Triple: NITI Aayog
According to India’s leading policy think tank, NITI Aayog, exports would triple from USD 20 billion to USD 60 billion by 2030, while the nation’s automotive component production will reach USD 145 billion.
“NITI Aayog has set a lofty but attainable goal for the Indian automobile industry by 2030. According to the estimate, exports will triple from USD 20 billion to USD 60 billion, and the nation’s manufacturing of automotive components would reach USD 145 billion,” the think tank body stated in a release.
NITI Aayog has released an insightful report titled “Automotive Industry: Powering India’s Participation in Global Value Chains”. This report offers an extensive analysis of India’s automotive sector, highlighting both opportunities and challenges, and outlining a pathway for positioning India as a key player in global automotive markets. NITI Aayog’s report outlines several strategic fiscal and non-fiscal interventions aimed at enhancing India’s global competitiveness in the automotive sector. The interventions are structured across four categories of automotive components based on their complexity and manufacturing maturity i.e. Emerging & Complex, Conventional & Complex, Conventional & Simple and Emerging & Simple. Under the fiscal interventions, it has suggested Opex (Operational Expenditure) support, skill development, R&D, IP transfer, and cluster development.
While under the non-fiscal interventions, NITI Aayog suggests measures such as industry 4.0 adoption, international collaboration, simplifying regulatory processes, worker hour flexibility, and, supplier discovery. In 2023, global automobile production reached approximately 94 million units. The global automotive components market was valued at USD 2 trillion, with the export share reaching approximately USD 700 billion.
India has emerged as the fourth-largest global producer after China, USA and Japan, with an annual production of nearly 6 million vehicles. The Indian automotive sector has gained a strong domestic and export market presence, particularly in the small car and utility vehicle segments. Supported by initiatives like ‘Make in India‘ and its cost-competitive workforce, India is positioning itself as a hub for automotive manufacturing and exports.
In spite of being the world’s fourth-largest automobile manufacturer, India only accounts for about 3% of the $20 billion global commerce in automotive components. Engine parts, drive transmissions, and steering systems account for the majority of worldwide automotive component commerce, but India’s share in these high-precision markets is still very small at only 2-4 percent.
India’s automotive sector faces challenges on account of operational cost, infrastructural gaps, moderate GVC integration, inadequate R&D expenditure etc. that hinder its competitiveness in the global value chain (GVC), NITI Aayog report added. (ANI)
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