Snapshot

    Leading Global Automotive Manufacturing Hub.

    Indian Auto Component Industry clocks highest-ever turnover of $69.7 Bn, grows 33% in FY 2022-23.

    The growing presence of global automobile Original Equipment Manufacturers (OEMs) in the Indian auto components industry has significantly increased the localization of their components in the country.

    The FDI inflow into Indian automotive industry during the period April 2000-March 2023 stood at $34.7 Bn.

    100% FDI in the automotive parts industry is allowed under the automatic route.

    For further details, please refer FDI Policy

     




     

    • %

      Share in India's GDP

    • Mn

      Employment generated

    • %

      CAGR (over 6 years)

    • $ Bn

      Auto Component exports

    The rapidly growing auto market in India is expected to reach $300 Bn by 2026.

    Automotive aftermarket segment in India is expected to reach $32 Bn by 2026.

    Auto Components industry exports to grow 5X in next 10 years.

    Industry Scenario

    The $46 Bn (FY21) Auto Components industry in India is expected to grow to $200 Bn by 2026.

    Indian Auto Component industry exports, which are currently valued at $20.1 Bn in FY21, are expected to reach $80 Bn by 2026. USA, Germany, UK, Thailand and Italy are the top destinations for exports.

    India's auto component industry recorded its highest trade surplus of $700 Mn in a financial year in 2021-22

    Aftermarket segment which includes Tyre, battery, brake parts, is expected to reach $32 Bn by 2026 from $9.8 Bn FY20.

    Auto components industry grows 34.8% to INR 2.65 lakh Cr in H1 FY23.

    The overall Indian auto components industry, which accounts for 2.3% of India's GDP currently, is set to become the 3rd largest globally by 2025.

    GROWTH DRIVERS

    • Expanding R&D hub

      8% of the country’s R&D expenditure is in the automotive sector

    • Emerging global sourcing hub

      Proximity to markets such as ASEAN, Europe, Japan and Korea

    • Cost competitive

      Excise duty reduction in vehicles will spur demand

    • Fifth largest vehicles manufacturer in the world

      India expected to be the third largest market by 2026

    • Favorable trade policy

      100% FDI allowed and no restrictions on import-export

    • Atmanirbhar Bharat

      PLI schemes in automobile and auto component sector with financial outlay of INR 25,938 Cr introduced under Atmanirbhar Bharat 3.0

    arrowarrow

    Production Linked Incentive (PLI) Scheme

    The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi announced the Production-Linked Incentive (PLI) Scheme in the Automobile and Auto Components sectors. The PLI scheme (outlay of $3.5 Bn) for the automobile sector proposes financial incentives of up to 18% to boost domestic manufacturing of advanced automotive technology products and attract investments in the automotive manufacturing value chain. Incentives are applicable for determined sales of products manufactured in India from April 1, 2022, for a period of five consecutive years. The scheme was closed on 9th January 2022. Recent Developments: 1) Total of 115 companies had filed their application under this scheme. Out of 115, total 85 applicants have been approved under this PLI scheme - 18 applicants for Champion OEM Incentive scheme and 67 applicants have been approved under Component Champion Incentive scheme. 2) The scheme has been successful in attracting proposed investment of INR 67,690 crore against the target estimate of investment INR 42,500 crore over a period of five years. 3) Apart from Indian business groups, approved applicants for Champion OEM Incentive scheme include groups from countries such as Republic of Korea, USA, Japan, France, Italy, UK and Netherlands.

    • INR 25,938 Cr

      Scheme Outlay

    Ministry

    Products

    Contact UsScheme Deatils

    Industrial Land Bank Portal

    GIS - based map displaying available infrastructure for setting up business operations in the state.

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    Major Investors

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    Gallery

    Jul 07, 2023Workshop on Production Linked Incentive (PLI) Schemes
    Workshop on Production Linked Incentive (PLI) Schemes
    Jul 07, 2023Workshop on Production Linked Incentive (PLI…Workshop on Production Linked Incentive (PLI) Schemes
    Republic Summit 2023
    Apr 27, 2023PM Modi's addresses Republic Summit 2023PM Modi's addresses Republic Summit 2023
    New India's Trade Performance
    Apr 13, 2023New India's Trade Performance by Piyush Goya…New India's Trade Performance by Piyush Goyal, Commerce & Industry Minister

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    FAQs

    Frequently
    Asked Questions

    Whether expenditure related to Transfer of Technology (ToT) Agreements including the purchase of technology are covered as eligible investment under the scheme?

    As per question 47 of the FAQs dated 8th October, 2021, the capital expenditure on Engineering Research & Development (ER&D) and product design & development is allowed under the scheme. It is further clarified that the Capital expenditure on ER&D and product design & development related to the eligible products shall be allowed for the purpose of Investment under the Scheme. The term “related” here refers to all stages in the entire value chain of the goods proposed to be manufactured including software integral to the functioning of the same. Such expenditure shall include expenditure on in-house and captive ER&D, directly attributable to eligible products, including all stages in the entire value chain of the goods proposed to be manufactured including software integral to the functioning of the same. Such expenditure shall include test and measuring instruments, prototypes used for testing, purchase of design tools, software cost (directly used for ER&D) & license fees, expenditure on technology & transfer of technology (ToT) Agreements including the purchase of technology, IPR, Patents and copyrights for ER&D, subject to all relevant documents for same being submitted to MHI/ PMA.

    Was it helpful?

    Will the Testing Agency of MHI follow approval procedure after the applicant approval from MHI or at the time of pre-approval stage?

    Approved applicant (i.e. post receipt of Approval letter under the Scheme) shall apply for registration/ approval of their products as approved eligible Advanced Automotive Technology (AAT) products with Testing Agency of MHI on an ongoing basis.

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    Whether expenditure on royalty is covered as eligible investment under the scheme?

    No. The expenditure on royalty is not covered under the scheme.

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    Is there any restriction on selection of AAT products by the approved applicants under the Scheme?

    An approved applicant under Champion OEM scheme will have option to seek incentive for any number of permissible AAT Vehicle products. Similarly, an approved applicant under Component Champion scheme will have option to seek incentive for any number of permissible AAT Component products. It may, however, be noted that Total Incentive per entire Group company(ies) is capped at ₹ 6,485crore (25% of total incentives outlay under this Scheme).

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    Can the revenue/ investment/ net worth of individual promoters of the companies/ group companies be considered under Global group revenue/ Global Investment/ Global net worth, respectively, for eligibility under the Scheme?

    No. Revenue/ investment/ net worth of individual promoters will not be considered under Global group revenue/ Global Investment/ Global net worth, respectively, for eligibility under the Scheme because the scheme recognises company/ group company(ies), not individual promoters.

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