NITI Aayog released a report titled: “Automotive Industry: Powering India’s Participation in Global Value Chains”, with a purpose to diagnose India’s automotive sector- opportunities, challenges- and chart a roadmap to boost its share in the global value chain (GVC).
Key Highlights Of Report
India ranks 4th globally in vehicle production (after China, USA, and Japan)
28 million vehicles produced in FY 2023–24
- 21 million two-wheelers (largest globally)
- 6 million cars and commercial vehicles
India’s auto component exports: $20 billion (3% global share)
Goal: Increase GVC share from 3% to 8% by 2030
Global Context:
- Global automobile production (2023): ~94 million units
- Global auto component market: $2 trillion; Export share: $700 billion
India’s Vision for 2030:
| Parameter | Target by 2030 |
|---|---|
| Auto component production | $145 billion |
| Component exports | $60 billion |
| Trade surplus | $25 billion |
| New jobs | 2–2.5 million |
Current Challenges
10% Cost Disability vs China
- High material, machinery, logistics & energy costs
- 100% depreciation rate vs 50% in China (adds ~3.4% cost burden)
Low Share in High-Precision Segments
- Only 2–4% global share in engine, transmission, and steering systems
Inadequate R&D & IP Ecosystem
- Low innovation & weak brand positioning
Trade Balance: Neutral
- Exports: $20B | Imports: $20B
- Top export destinations: USA (28%), Europe (27%), Asia (19%)
- Top import sources: China (23%), Germany (13%), South Korea (11%)
Growth Drivers & Government Interventions
Major Government Schemes:
Make in India (2014) – Boosts domestic manufacturing, reduces import dependency
Atmanirbhar Bharat – Self-reliant ecosystem in auto components and EV batteries
FAME Scheme (Phases I & II) – ₹11,500 crore allocated for EV promotion
PM E-Drive Scheme (2024–26): ₹10,900 crore
- 24.79 lakh electric 2-wheelers
- 3.2 lakh electric 3-wheelers
- 14,028 electric buses
- ₹2,000 crore for charging infrastructure
PLI Scheme for Auto & ACC Batteries: ₹44,038 crore
- ₹25,938 crore: PLI (Automobiles)
- ₹18,100 crore: PLI (Advanced Chemistry Cell batteries)
Proposed Interventions (NITI Aayog Recommendations)
Fiscal Measures:
- Opex & Capex Support: Tools, dies, infrastructure
- Skill Development: Workforce readiness for Industry 4.0
- R&D Incentives: Innovation, branding, IP support
- Cluster Development: Shared testing and R&D facilities