India's top policy think tank body NITI Aayog has envisions the country's automotive component production growing to USD 145 billion by 2030, with exports tripling from USD 20 billion to USD 60 billion.
"NITI Aayog's vision for India's automotive sector by 2030 is ambitious yet achievable. The report envisions the country's automotive component production growing to USD 145 billion, with exports tripling from USD 20 billion to USD 60 billion," the think tank body added 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.
Despite being the fourth-largest automobile producer globally, India has a modest share (around 3 per cent) in the global automotive component trade, which amounts to approximately $20 billion.
The bulk of global trade in automotive components is driven by engine components, drive transmission, and steering systems, but India's share in these high-precision segments remains low at just 2-4 per cent.
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.