Over the period between FY16 to FY21, automotive components industry registered a CAGR of 3.28%, reaching US$ 45.90 billion in FY21, with exports growing at a CAGR of 4.19% during FY16-FY21 to reach US$ 13.30 billion in FY21. The automobile component industry turnover stood at Rs. 1.96 lakh crore (US$ 26.6 billion) between April-September 2021 and is expected to see revenue growth of 15-17% in the fiscal year. The auto components industry accounted for 7.1% of India’s GDP, contributed 49% to the manufacturing GDP, and provided employment to 50 lakh people in FY21. The Auto components industry is expected to grow to US$ 200 billion by FY26.

Due to high development prospects in all segments of the vehicle industry, the auto component sector is expected to rise by double digits in FY22.

India’s auto component’s aftermarket witnessed a 25% growth from Rs. 31,116 crore (US$ 4.1 billion) in H1 2020-21 to Rs. 38,895 crore (US$ 5.3 billion) in H1 2021-22. Strong international demand and resurgence in the local original equipment and aftermarket segments are predicted to help the Indian auto component industry grow by 20-23% in FY22.

As per Automobile Component Manufacturers Association (ACMA), automobile component export from India is expected to reach US$ 80 billion by 2026. The Indian auto component industry aims to achieve US$ 200 billion in revenue by 2026.

India has a very strong position in the international market. It is the largest manufacturer of tractors, second-largest manufacturer for buses and the third largest for heavy trucks in the world. Indian automotive industry (including component manufacturing) is expected to reach between Rs. 16.16-18.18 trillion (US$ 251.4-282.8 billion) by 2026. Indian automobile industry (Includes automobiles and auto components) received Foreign Direct Investment (FDI) worth US$ 30.51 billion between April 2000 and June 2021.

A cumulative investment of ~Rs. 12.5 trillion (US$ 180 billion) in vehicle production and charging infrastructure would be required until 2030 to meet India’s electric vehicle (EV) ambitions. This is likely to boost the demand of auto components from local manufacturers.

In February 2022, the government received investment proposals worth Rs. 45,016 crore (US$ 6.04 billion) from 20 automotive companies under the PLI Auto scheme. This scheme is expected to create an incremental output of Rs. 2,31,500 crore (US$ 31.08 billion).

In March 2021, the government announced to offer fresh incentives to companies making electric vehicles (EVs) as part of a broad auto sector scheme. The scheme is expected to attract US$ 14 billion of investment in the next five years.

The Indian government has outlined US$ 7.8 billion for the automobile and auto components sector in production-linked incentive schemes under the Department of Heavy Industries.

In November 2020, the Union Cabinet approved PLI scheme in automobile and auto components with an approved financial outlay over a five-year period of Rs. 57,042 crore (US$ 8.1 billion). In September 2021, the Indian government issued notification regarding a PLI scheme for automobile and auto components worth Rs. 25,938 crore (US$ 3.49 billion).

Domestic automobile production increased at 2.36% CAGR during FY16-FY20 with 26.36 million vehicles being manufactured in the country in FY20. Production of two wheelers, passenger vehicles, commercial vehicles and three wheelers reached 21.03 million, 3.43 million, 0.75 million, and 1.13 million, respectively, in FY20. In January 2022, the total output of passenger vehicles, three-wheelers, two-wheelers and quadricycles was 1,860,809 units.

Automobile export is expected to grow at a CAGR of 3.05% during 2016-2026. The Government of India expects automobile sector to attract US$ 8-10 billion in local and foreign investment by 2023.

In December 2021, Mr. Nitin Gadkari, Minister of Road Transport and Highways has asked auto makers to start producing flex-fuel vehicles in the next 6 months.

In December 2021, Tata Motors has lined up investments worth more than US$ 1 billion in the next 4-5 years for its commercial vehicle business.

In November 2021, MG Motor India has teamed up with CleanMax to become the world's first passenger car manufacturer to use a wind-solar hybrid energy system.

In December 2021, MG Motor India was exploring export opportunities in the UK and South Africa. The company has plans to make India an export hub.

In October 2020, Japan Bank for International Cooperation (JBIC) agreed to provide US$ 1 billion (Rs. 7,400 crore) to SBI (State Bank of India) for funding the manufacturing and sales business of suppliers and dealers of Japanese automobile manufacturers as well as providing auto loans for the purchase of Japanese automobiles in India.

In December 2020, Power PSU JV EESL announced plan to install ~500 electric vehicle (EV) charging stations in the country in fiscal 2020-21.

In October 2021, Maharashtra government signed an MoU with Causis E-Mobility Pvt. Ltd., a joint venture of the UK-based Causis Group, to set up a zero-emission electric vehicle (EV) manufacturing facility at Talegaon, near Pune, with an investment of Rs. 2,800 crore (US$ 317.96 million).