Mumbai: The revenue of India’s automotive components industry is expected to cross $80.1 billion in FY2025 while exports have already touched $21.2 billion, according to B2B risk management consultancy Rubix Data Sciences.
While the country’s production of automotive components has been growing at an 8 per cent compound annual growth rate (CAGR) since FY2020, exports have recorded a CAGR of 10 per cent during the same period, the report says.
One of the standout trends is the doubling of the EV components industry’s contribution to 6 per cent of total production in FY2024. Battery technology and powertrain systems are emerging as critical areas, comprising 45 per cent of EV manufacturing costs. India’s EV market, supported by the EV 30@30 initiative, saw sales grow by over 76 per cent CAGR from FY2020 to FY2024, with projections to maintain this momentum, the report states.
The Indian government’s focus on localisation and self-reliance has led to significant investments in domestic manufacturing capabilities. Between FY2020 and FY2024, exports saw a 10 per cent CAGR, reaching $21.3 billion, with the US being the largest market. Simultaneously, a trade surplus of $300 million in FY2024 underscores India’s strategic shift in global automotive supply chains, the report points out.
The report also focuses on investments in technology upgrades and modernization, with Indian manufacturers allocating $2.5 billion to $3 billion for capacity expansion and innovation. This aligns with the increasing demand for advanced components such as electric motors, Advanced Driver Assistance Systems (ADAS), and lightweight materials. The report forecasts a sixfold growth in the ADAS market, from $169 million in FY2023 to nearly $1 billion by FY2028.
Rubix Data Sciences co-founder & CEO Mohan Ramaswamy said: “India is rapidly becoming a vital player in the global automotive supply chain, thanks to robust growth in vehicle production, strong government support, and the unwavering commitment of component manufacturers – including a vibrant network of SMEs – to quality and innovation. We believe this momentum will position India as an indispensable sourcing hub for global OEMs, especially as the industry seeks reliable, diversified alternatives.”
Policies such as the PLI scheme, PM e-Bus Sewa initiative, and the Vehicle Scrappage Policy are further helping industry growth. The PLI scheme alone aims to generate significant employment while fostering economies of scale in advanced automotive technologies. The Automotive Mission Plan 2047 sets ambitious targets, including a 50 per cent export share of automotive vehicles and components by 2047, positioning India as a global manufacturing powerhouse, the report states.
However, despite the encouraging trends, the industry faces challenges like increasing Chinese imports of EV components and adapting to stringent BS VII norms. Additionally, SMEs, which account for nearly 80 per cent of the sector by volume, are grappling with the need to modernise and align with the EV transition, it observes.
The report emphasizes the urgency for innovation in lightweight materials, emission control systems, and advanced manufacturing techniques to maintain competitiveness.
India’s automotive components industry is not only a key pillar of its domestic economy but also a growing force in global supply chains. There is a bright future for India’s automotive components industry, with investments in ADAS projected to grow sixfold to $1 billion by FY2028. The aftermarket segment is expected to reach $14 billion by 2028, driven by pre-owned vehicle sales and the growing vehicle parc, which is anticipated to surpass 340 million units by 2028, the report adds.
–IANS