New Delhi, March 4 India's auto component industry can target $100 billion in exports, as global original equipment manufacturers (OEMs) reassess their supply chains and manufacturing strategies, presenting India with an optimal opportunity to establish itself as a top global destination, according to a report on Tuesday.
The auto component exports reached $21.2 billion in FY24, marking a significant turnaround from a $2.5 billion deficit in FY19 to a $300 million surplus
According to the latest report by Automotive Component Manufacturers Association of India (ACMA) and Boston Consulting Group (BCG), with doubling down on classical components, India can potentially add another $40-60 billion in incremental exports by prioritising 11 product families, with focus on US and Europe markets.
Second, capitalising on emerging EV and electronic value chain through localisation today, India can look to tap into additional $15-20 billion exports in components such as battery management systems, telematics units, instrument clusters and ABS, the report mentioned.
“We have not only achieved a positive trade balance, but for auto-specific use cases, the surplus is even more pronounced, reaching approximately $0.5-1.5 billion. We are committed to sustaining this growth trajectory and have set an ambitious target of $100 billion in exports ahead,” said Shradha Suri Marwah, President at ACMA.
Global OEMs are major customers of India's auto component industry, accounting for 20-30 per cent of exports.
Vikram Janakiraman, Managing Director and Senior Partner at BCG, said that encouraging two-three global OEMs to establish manufacturing bases in India can serve as an anchor – “helping the domestic auto component players to gain a deeper understanding of global OEM requirements, integrate more seamlessly into their supply chains, and enhance India’s position in the global auto component market."
In the German market, which is predominantly influenced by Eastern European suppliers, India emerges as a cost-effective alternative, offering components at prices up to 15 per cent lower.
In the US market, which is current dominated by imports from Mexico and China, Mexico offers components at 2-5 per cent lower prices due to reduced logistics and tariff costs. Conversely, Chinese components are 20-25 per cent more expensive compared to India, largely because of additional tariffs.
Vinnie Mehta, Director General at ACMA, underscored the importance of seizing the current growth phase.
“To fully capitalise on this opportunity, major Indian players must aim to expand their exports by 5-10 times and achieve deeper penetration into global supply chains,” said Mehta.
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