As India shifts gears to become a dominant force in the global automotive supply chain, NITI Aayog has laid out a bold roadmap for the future. The think tank has laid out a transformational strategy to double the country’s auto component production to $145 billion and triple exports to $60 billion by FY30. This ambitious Vision 2030 aims to establish India as a key player in the global automotive value chain, increasing its current 3% share to a competitive 8%.
According to NITI Aayog, these targets could generate a trade surplus of around $25 billion and create 2.5 million direct jobs, taking total employment in the sector to 3-4 million. The roadmap, detailed in the report Automotive Industry: Empowering India’s Participation in Global Value Chains, emphasises a mix of fiscal and non-fiscal initiatives to unlock the full potential of the sector.
Driving growth with fiscal support and cluster development
One of the primary recommendations of NITI Aayog is the introduction of operating expenditure (opex) support to enhance manufacturing capabilities. This will focus on capital-intensive areas such as tooling, dies, and infrastructure. It aims to reduce operating costs and attract global manufacturers to India.
Further, the report emphasises the importance of cluster development. Creating large-scale brownfield auto clusters equipped with shared R&D and testing centres can enhance collaboration among firms and strengthen supply chains. These facilities are particularly important to empower MSMEs and encourage innovation through government-supported IP transfer.
Leveraging R&D and branding for global competitiveness
NITI Aayog underlines the need to improve India’s footprint in high-precision automotive segments such as engine components and steering systems, where the current global share is a modest 2-4%. To bridge this gap, the report calls for increased investments in R&D, international branding and skill initiatives.
Government-backed incentives for innovation, product development and branding are considered essential to enhance product differentiation. This will not only boost exports but also make Indian auto components globally competitive.
Industry 4.0 and Digital Transformation
The shift towards Industry 4.0 is a central pillar of NITI Aayog’s strategy. Technologies such as AI, machine learning, robotics and IoT are revolutionising automotive manufacturing by improving efficiency, reducing production costs and enhancing product quality.
Encouraging the adoption of these technologies is the key to modernising India’s automotive sector. A digitally advanced manufacturing ecosystem will support new business models focused on smart factories and connected vehicles, ensuring that India keeps pace with global trends.
FTA and Global Market Access
Since most automotive giants are based in the US and the EU, NITI Aayog emphasises the urgent need to negotiate free trade agreements (FTAs) with these regions. Enhanced market access through FTAs ​​can significantly boost exports and attract international collaborations and joint ventures.
Non-fiscal measures also include simplifying business regulations, increasing flexibility in workforce management and facilitating supplier discovery. These reforms are aimed at improving the ease of doing business and attracting more investments into the sector.
Taking advantage of global opportunities
With the global auto component market valued at $2 trillion and exports at $700 billion, NITI Aayog believes that India’s annual vehicle production of around six million units provides a strong base for expansion. The report sees the rise in global demand, especially in electric vehicles (EVs), as a golden opportunity for India to become more deeply integrated into global supply chains.
Advances in battery technology and growing interest in sustainable mobility are reshaping the global automotive landscape. NITI Aayog points out that aligning India’s production ecosystem with these emerging trends is critical for long-term competitiveness.
Roadmap for a resilient future
The vision laid out by NITI Aayog is clear: to transform India from a minor participant in the global automotive value chain to a major contributor. Achieving the $145 billion production and $60 billion export target by 2030 will require coordinated efforts between the government, industry leaders and stakeholders at all levels.
Focused policy support, robust infrastructure development, digital transformation and international partnerships are the building blocks of this ambitious plan. If implemented successfully, India could soon move from factories to the global spotlight as a powerhouse in automotive manufacturing.
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