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Leading Global Automotive Manufacturing Hub

The growing presence of global automobile Original Equipment Manufacturers (OEMs) in the Indian manufacturing landscape has significantly increased the localisation of their components in the country. India has become the preferred designing and manufacturing base for most global Auto OEM's for local sourcing and exports.

100% FDI allowed under automatic route

for more details refer FDI Policy 2017


  • Rapidly growing Indian auto market to touch USD 300 bn by 2026
  • Exports to grow 5X by 2026
  • Indian Auto Components aftermarket segment expected to reach USD 32 bn by 2026

Industry Scenario

The USD 43.5 bn Indian auto component  industry is expected to grow to USD 200 bn by 2026.

The local industry is growing at the rapid rate of 14.3% in tandem with the parent OEM industry. Two biggest consumer segments are the Passenger Vehicles and 2 Wheelers. 

Exports valued at USD 10.9 bn; growing at the YoY rate of 3.1% to reach USD 80 bn by 2026. Top 5 countries of Export include: - USA, Germany, Turkey, UK, Italy.

One of the biggest components of this industry is the aftermarket segment which is valued at USD 8.4 bn which is expected to reach USD 32 bn by 2026.

Growth Drivers

Auto comp GD
  • India's GDP contribution


  • Employment generated

    3 mn

  • Transmission, Steering parts % share


  • Hybrid & electric vehicles sale (by 2020)

    6 mn plus

Key policies

Automotive Mission Plan (2016-26)

Envisions to develop India as one of the top 3 automobile manufacturing, engineering and export hubs in the world with a turnover of $300 bn, generate 65 mn direct & indirect jobs and contribute 12% of India's GDP by 2026

Faster Adoption and Manufacturing of Hybrid and Electric vehicles (FAME)

Offers incentives on electric and hybrid vehicles of up to USD 430 for bikes and USD 2050 for cars.

National Auto Policy 2018

The objectives of the National Auto Policy will be met through policy interventions across five identified focus areas:

1. Innovation, Research and Development

2. Vehicle Manufacturing

3. Auto Component Manufacturing in India

4. Green Mobility

5. Eco-system development

National Electric Mobility Mission Plan 2020 (NEMMP)

Aims at creating a vehicle base of ~7 million electric cars by 2020. India has plan of becoming an all electric fleet by 2030.

National Automotive Testing and R&D Infrastructure Project (NATRiP)

Aims to create a testing, validation and R&D infrastructure, and has invested Rs 1,718 crore for setting up of seven auto testing facilities across India.

FDI Facts

  • Share of total FDI inflows

  • Jump in the auto sector FDI from 2014-2016

  • FDI allowed in the sector

Recent Investments

  • February 2018 - Auto maker Mahindra and Mahindra today said it has tied up with Korea-based battery manufacturer LG Chem for development of a unique cell exclusively for India.

  • September 2017 - Hella India Automotive to set up second manufacturing facility in Gujarat; plans new products for hybrids and EVs in India

  • September 2017 - Suzuki, Toshiba, Denso to jointly produce EV batteries in India

  • August 2017 - Bridgestone to invest USD 304 mn over 5 years to expand India plants.

  • March 2017 - Motherson Sumi Systems Ltd, an automobile components manufacturer, has acquired Finland-based truck wire maker PKC Group Pic for USD 609.5 mn, which will help the company expand its presence in the global wiring harness business for commercial vehicles.

Major Investors