Goyal Tells Indian Auto Component Makers to Go Global, Build Manufacturing Footprint Overseas

Indian auto component manufacturers should move beyond building strong domestic and export businesses and start establishing manufacturing footprints in developed markets, Commerce and Industry Minister Piyush Goyal said, calling globalisation the next phase of growth for the industry.

Speaking at the 66th annual session of the Automotive Component Manufacturers Association of India (ACMA), Goyal said Indian suppliers have built capabilities in cost and quality and are now ready to compete more aggressively in global markets.

“Now it is time that we go to the world. We start manufacturing across the world. We start making our footprint in developed countries,” Goyal said.

Goyal said Indian auto component companies should use the market access opened up through India's recent trade agreements to expand their presence across Europe, the US and other developed economies.

He said nine trade agreements finalised by the government over the past few years provide access to 38 developed countries with a combined GDP of around $60 trillion.

According to Goyal, the auto component industry's message during trade negotiations has consistently been that it is prepared to compete with global companies if it receives reciprocal market access.

“Get us zero-duty access in that country and open up our sector to zero-duty from that country. We can take on the best in the world, happy to take on any challenge,” he said, recounting the industry's position.

Move Up the Value Chain

Goyal also urged suppliers to move beyond manufacturing individual components and develop higher-value integrated products and solutions.

“Move up the value chain,” he said. “I think it's time we started delivering integrated very high-value solutions where we have designed, built and supplied to the world top-quality products which should be the envy of the world.”

The call mirrors a broader shift within the auto component industry as suppliers take on more responsibility in design, engineering and technology development rather than manufacturing parts purely to specifications provided by vehicle makers.

Global Expansion Must Go with Deeper Indigenisation

Even as Indian suppliers expand overseas, Goyal said companies should continue reducing vulnerabilities within their domestic supply chains.

He asked manufacturers to identify products where dependence on imports could expose them to future disruptions.

“For those products where you still need to bring resilience in your supply chain, have an active indigenization program to insulate and protect yourself from future black swan events,” he said.

Goyal said government programmes supporting speciality steel, technical textiles and semiconductors should also be viewed as measures aimed at strengthening automotive supply chains.

He also pointed to critical minerals as an area where India is working to diversify sourcing. The government will seek trade arrangements with more countries to improve access to such minerals, he said.

Developed Markets Offer Bigger Opportunity

Goyal particularly encouraged companies to look beyond traditional export destinations and target developed economies.

He pointed to the US and Europe as markets where Indian companies could expand and said stronger international partnerships could create jobs both in India and overseas.

“Gone are the days where one had to look from a position of fear or a defensive position,” Goyal said. “Both parties can play offensive.”

He said India and its partners could work together to become more competitive and capture global markets.

The minister also floated the possibility of creating dedicated industrial infrastructure for auto component manufacturers in India. Referring to plans for additional industrial smart cities with plug-and-play infrastructure, he suggested that some parks could potentially be tailored to the sector.

“Maybe we can add two or three, five parks which will be for auto components only. Then I can create a plug and play infrastructure to suit you directly,” he said.

Goyal presented this as a possibility rather than announcing a firm plan.