India is emerging as a global hub for auto component sourcing and is set to break into the league of top five vehicle producing nations worldwide.
Total turnover of India's auto -components sector is expected to almost treble in size from US$ 43.5 billion in FY12 to US$ 113 billion in FY21. The domestic market is expected to account for 80 per cent of total sales by 2020 with a total market size of US$ 80 billion.
India's exports of auto components increased at a compound annual growth rate (CAGR) of 17 per cent over FY07-12 to US$ 6.8 billion. Europe accounts for the largest share of Indian auto components exports (36 per cent) followed by Asia (28 per cent) and North America (23 per cent).
The country is also emerging as a sourcing hub for engine components. Major global original equipment manufacturers (OEMs) are planning to make India a component sourcing hub for their global operations. Several global Tier-I suppliers have also announced plans to increase procurement from their Indian subsidiaries.
The Department of Heavy Industries and Public Enterprises has created a US$ 200 million fund to modernise the auto components industry by providing an interest subsidy on loans and investment in new plants and equipment. It has also provided export benefits to intermediate suppliers of auto components against the Duty Free Replenishment Certificate (DFRC).