Advantage India
Robust
Demand
* Growing working population and expanding middle class are expected to remain key demand drivers.
* By 2025, 4 million of EVs could be sold each year and 10 million by 2030. The market is expected to reach US$ 206 billion by 2030.
Export
Opportunities
* India is emerging as a global hub for auto component sourcing and the industry exports over 25% of its production annually.
* Auto component exports are expected to grow and reach US$ 30 billion in FY26.
* India has a competitive advantage in auto components categories such as shafts, bearings and fasteners due to large number of players. This factor is likely to result into higher exports in coming years.
Policy
Support
* 100% FDI is allowed under the automatic route for auto components sector.
* Production Linked Incentive (PLI) schemes on automobile and auto components are expected to bring a capex of Rs. 74,850 crore (US$ 9.58 billion) in the next five years.
Competitive
Advantage
* A cost-effective manufacturing base keeps costs lower by 10-25% relative to operations in Europe and Latin America.
* India is the second largest steel producer globally, hence has a cost advantage.
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