McKinsey & Company and the Automotive Component Manufacturers Association of India (ACMA) project that India’s auto component sector will grow to USD 200 billion by FY 2030. The report, Shaping the Future of India’s Auto Component Industry Amid Global Trade Shifts, was released at ACMA’s 65th Annual Session in New Delhi.
According to the McKinsey-ACMA study, India’s auto component exports are expected to reach USD 70-100 billion by FY 2030, while domestic sales are forecast to grow at 7-8 percent annually. Two key growth drivers identified in the report are a USD 20-30 billion export opportunity in internal combustion engine (ICE) components and a projected 35 percent compound annual growth rate in domestic electric vehicle (EV) sales.
The study also observes that geopolitical and structural changes are reshaping global auto component trade. It estimates that USD 12-14 trillion in trade flows may shift across trade corridors by 2035, and global trade overall is projected to rise from USD 33 trillion in 2024 to USD 42-45 trillion by 2035. India, supported by cost competitiveness and a skilled workforce, is emerging as a significant player in this realignment.
At the convention, Hisashi Takeuchi, Managing Director and CEO of Maruti Suzuki India, emphasized the need for sustained policy stability if India is to solidify its position as a global manufacturing hub. He pointed out U.S. tariffs as a significant challenge: nearly 30 percent of India’s auto component exports go to the United States with approximately half of those exports subject to 25 percent duty and the other half to 50 percent duty. He noted, however, that bilateral discussions have shown positive developments.
ACMA President Shradha Suri Marwah reported that the industry’s turnover in FY 2024-25 reached USD 80.2 billion (approximately INR 6.73 trillion), with exports at USD 22.9-23 billion. She stressed the necessity for resilience in light of geopolitical headwinds, technological shifts, and sustainability demands.
Heavy Industries & Steel Minister H. D. Kumaraswamy stated that production-linked incentive (PLI) schemes have attracted about INR 295 billion in investments and created over 45,000 jobs. Commerce Minister Piyush Goyal remarked that ongoing free trade agreement negotiations with the European Union could unlock new opportunities, while Road Transport Minister Nitin Gadkari discussed plans to accelerate adoption of clean fuels and advanced mobility technologies.
The ACMA 65th Annual Session, held under the theme “Navigating Geopolitical Challenges – Creating a Resilient Automotive Supply Chain in India,” was attended by more than 1,200 delegates.
