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India's manufacturing base and cost advantages will position the country suitably for potential market leadership in coming years, said NITI Aayog in its latest report.
"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. As per the report, India's auto component exports have risen from USD 7.4 billion in Financial Year 2021 (FY21) to USD 12.8 billion in FY24. Particularly noteworthy is the fact that since FY21, India saw a 73 percent surge in exports, thereby reflecting India's post-pandemic recovery and increasing global demand for auto component parts. On the export front, India's exports are heavily dominated by Drive Transmission Systems (DTS), Engine Components, and Electrical and Electronics components, which together account for 53 percent of India's total auto component export share. Major countries that are India's primary destinations for auto component exports are North America and Europe, which account for 34 percent. and 27 percent of exports, with the USA standing out as a key export market for India since 28 percent of auto component exports are driven by its large automotive industry and aftermarket sector. Germany is another important auto component market for India, as 7 percent of India's auto component export share is taken up by Germany. The demand for high-quality automotive parts, especially engine components and transmission systems, is a testament to India's capabilities, combined with the fact that many components produced in India are used in vehicles manufactured by global brands operating in Europe. Proximity to Africa and Southeast Asia also provides India an opportunity to further grow its export share through such emerging markets where demand for auto components is expected to rise as auto sales and manufacturing grow in these countries, the NITI Aayog said in the report. Similarly, on the import front, India has witnessed an 80 percent increase in its auto component imports, from USD 6.7 billion in FY21 to USD 12.1 billion in FY24, dominated by engine components and body/chassis/Body-in-White (BIW). China is the largest auto components supplier to India, contributing close to 23 percent of India's imports, the NITI Aayog report added. (ANI)
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