India's auto-component industry to touch US$ 200 billion by 2030: McKinsey

India’s auto-component industry is poised to reach US$ 200 billion by 2030, supported by its cost competitiveness, skilled workforce, and growing domestic demand, according to a McKinsey report titled Shaping the future of India’s auto component industry amid global trade shifts. The report highlighted that structural and geopolitical changes are redrawing global trade corridors, with an estimated US$ 12 trillion to US$ 14 trillion in trade expected to shift by 2035. Despite these challenges, global trade is projected to expand from US$ 33 trillion in 2024 to US$ 42-45 trillion by 2035. India is emerging as a beneficiary of this realignment, as evidenced by the auto-component sector’s compound annual growth rate (CAGR) of nearly 10% over the past five years. Domestic sales are expected to grow at 7-8% annually until FY30, driven by higher vehicle penetration, increased parts usage per vehicle, and the adoption of new technologies.
Exports are projected to touch US$ 70-100 billion by FY30, led by two key growth pillars. These include a US$ 20-30 billion opportunity in internal combustion engine (ICE) exports as global markets consolidate, and a 35% CAGR in domestic electric vehicle (EV) sales, in line with global electrification and connectivity trends. To strengthen resilience, companies are increasingly adopting supply-chain diversification strategies, including localisation, expanding production capacity in low-risk regions, and multi-sourcing. Several global players are expanding Indian production facilities, while automakers worldwide are reducing dependency on single-source vendors, particularly from China, and diversifying to alternative markets.  

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