While India’s automotive industry is a jewel in the country's crown and accounts for upwards of 7.1 percent of the country’s GDP and 49 percent of the manufacturing GDP, it is still plagued by heavy import dependence on countries like China.
In his address at the 61st ACMA annual convention, Amitabh Kant, CEO, NITI Aayog, said, "India needs to de-risk supply chains by boosting localisation and reducing dependency on imports, particularly from China. We must immediately focus to localise parts such as forged and machined components and lightweight polymer-based parts which can be localised in a short period.”
He remarked that the global supply chain rebalancing and government’s incentives to increase exports are creating opportunities at all levels of the automotive value chain and it is time for the industry to drive its machinery at full throttle.
Kant stressed that it’s also important that components which are being imported from China purely for cost competitiveness and lack of development capabilities in India get manufactured here. “Certain parts for BS VI norms such as catalytic convertors and EFI systems need to see increased localisation over the next few quarters. These are all being sourced from China,” he said.
“Dependency on China for electronics, semiconductor-based parts, tooling, moulds and raw materials such as magnets for electronic and electrical motors must not only be minimised but completely eliminated,” he championed.
The Department of Heavy Industries (DHI) had announced to a PLI incentive outlay of over Rs 57,000 crore for five years for driving auto component manufacturing and exports, and similarly an outlay of Rs 18,100 crore by the NITI Aayog and DHI for advanced cell manufacturing to enhance India’s manufacturing and export capabilities, as battery cells are going to emerge as key drivers of change.
Kant also touched upon the relative ease with which India can transition towards e-mobility, given a significantly lesser conventionally-powered car parc compared to the developed world. “Electric and shared mobility will be key components of growing urbanisation in India,” he said.
“Therefore, indigenisation of EVs and EV components is critical to drive EV growth and we should target not be a major importer in EV components as we are in solar. Number of start-ups registered in the EV sector in India is rapidly growing and established players stand a risk of losing market share if not acted upon quickly,” Kant signed off.