India’s auto component exports reached $21.2 billion in FY24, with projections suggesting they could grow to $100 billion as global original equipment manufacturers (OEMs) adjust their supply chains, according to a report released by the Automotive Component Manufacturers Association of India (ACMA) and Boston Consulting Group (BCG).
The report indicates that India has moved from a $2.5 billion trade deficit in auto components in FY19 to a $300 million surplus in FY24. It identifies 11 key product categories that could contribute an additional $40-60 billion in export value, particularly targeting the US and European markets.
Further growth of $15-20 billion could come from India’s localisation of electric vehicle (EV) and electronic components, including battery management systems, telematics units, instrument clusters, and anti-lock braking systems (ABS).
Shradha Suri Marwah, President of ACMA, stated that the industry has strengthened its trade balance, with auto-specific components alone generating a surplus of $0.5-1.5 billion.
The report also highlights the potential impact of attracting two to three global OEMs to establish manufacturing bases in India. This could enhance the integration of Indian manufacturers into international supply chains and improve their competitiveness.
The study compares India’s cost advantage with other markets, noting that Indian components are up to 15% cheaper than those from Eastern Europe, while Chinese components are 20-25% more expensive due to tariffs. In the US market, Indian components face competition from Mexican imports, which are 2-5% cheaper due to logistical and tariff benefits.
Vinnie Mehta, Director General of ACMA, stated that Indian manufacturers need to expand exports by five to ten times to strengthen their position in global supply chains.
The findings suggest that India has an opportunity to expand its presence in the global auto component industry as trade patterns evolve.