India-US, EU trade engagement to boost auto components, battery ecosystem
- IBEF
- February 12, 2026
India is trying to shift and nudge its existing trade relationship with the US and the European Union in a measured manner, which is gaining traction for improving auto component exports and developing a battery ecosystem for the development of a homegrown advanced manufacturing industry, as asserted by the Union Minister for Heavy Industries Mr. HD Kumaraswamy. India’s existing negotiations are trying to capitalize on better market access, smooth and efficient trade, and the creation of alignment in existing regulations, particularly relating to aspects of efficiency, sustainability, and next-generation auto-tech. India wants to enhance the competitive standing of Indian manufacturers and further incorporate India into the dynamic and changing international supply chains. Breakthroughs are essential for preserving India’s competitive edge in the auto and auto component arena with the advent of India’s rising vehicle production and exports, particularly relating to aspects pertaining to electronic systems, lightweight materials, and intelligent auto-tech.
For facilitating localisation, incentives are being provided. Under the Production Linked Incentive scheme, the incentives are for the automobiles and auto-components sector with an outlay of Rs. 26,000 crore (US$ 2.89 billion). Additionally, the Advanced Chemistry Cell Battery PLI scheme, with an outlay of Rs. 18,100 crore (US$ 2.01 billion) aims to create 50GWH capacity in battery manufacturing in the domestic sector. The Budget has proposed an outlay of around Rs. 13,000 crore (US$ 1.44 billion) to sustain the construction equipment scheme, which aims to strengthen the heavy engineering and capital goods sector. Other initiatives such as rare earth corridors and permanent magnet manufacturing would propel the next-gen mobility and energy security.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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