Auto Component Industry Growth - Infographic

The Indian auto components industry is expected to grow to US$ 200 billion by FY26

Advantage India

Robust
Demand

* Growing working population and expanding middle class are expected to remain key demand drivers.

* India is witnessing robust demand for auto components amid ongoing shift in global supply chain.

* With plans to reduce auto components’ import dependence, domestic players are expected to witness a demand surge.

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.

* By FY28, the Indian auto industry aims to invest Rs. 58,000 crore (US$ 7 billion) to boost localization of advanced components like electric motors and automatic transmissions, reducing imports and leveraging 'China Plus One’ trend.

Policy
Support

* 100% FDI is allowed under the automatic route for auto components sector.

* In January 2024, the Government of India approved additional fund of Rs. 1,500 crore (US$ 180.3 million) for second phase of FAME- II.

* The Bharat New Car Assessment Program (BNCAP) will not only strengthen the value chain of the auto component sector, but it will also drive the manufacturing of cutting-edge components, encourage innovation, and foster global excellence.