According to NITI Aayog's latest report, India's advantages in manufacturing and cost will effectively position the nation for potential market leadership in the years ahead.
"India's presence in the global automotive component market is relatively small. However, India's growing manufacturing base and cost advantages position it suitably for potential market leader in coming years," said the report.
According to the report, India’s auto component exports increased from USD 7.4 billion in Financial Year 2021 (FY21) to USD 12.8 billion in FY24.
Of particular significance is that since FY21, India has experienced a 73 percent increase in exports, indicating India's recovery after the pandemic and the rising global demand for auto parts.
In terms of exports, Drive Transmission Systems (DTS), Engine Components, and Electrical and Electronics components significantly dominate India's exports, representing 53 percent of the nation's total auto component export share.
The main countries that serve as India's top markets for auto component exports are North America and Europe, which make up 34 percent. Additionally, 27 percent of exports, with the USA being a major export destination for India, as 28 percent of auto component exports are propelled by its extensive automotive industry and aftermarket sector. Germany represents another significant market for auto components from India, accounting for 7 percent of India's auto component export share.
The need for premium automotive parts, particularly engine parts and transmission systems, reflects India's competencies, along with the reality that numerous components made in India are utilized in vehicles created by international brands active in Europe.
India's closeness to Africa and Southeast Asia presents an opportunity to increase its export share in emerging markets, where demand for auto components is anticipated to climb alongside the growth of auto sales and manufacturing in those nations, as stated in the report by NITI Aayog.
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