India Auto Industry Cut Imports by Over Rs 20,000 Crore Through Localisation: SIAM President Chandra

India's automotive industry has reduced imports by more than Rs 20,000 crore through localisation initiatives, as vehicle makers and suppliers work to strengthen domestic supply chains and reduce dependence on overseas sourcing, SIAM President Shailesh Chandra said.

Chandra, who is also Managing Director of Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, said the localisation push has been undertaken jointly by SIAM members and the Automotive Component Manufacturers Association of India (ACMA).

“The industry has achieved a reduction in the imports exceeding Rs. 20,000 crore,” Chandra said at the 66th SIAM Annual Convention.

He said the reduction translated into a 16.6% decline in imports in FY25 compared with the FY20 baseline.

Localisation efforts have covered areas including engines, iron and steel, Chandra said, adding that localisation is also an important part of the industry's broader sustainable mobility and decarbonisation strategy.

“Localization forms an integral part of our approach to sustainable mobility and decarbonization through collaborative initiatives led by SIAM members and ACMA across categories, including engines and iron and steel,” he said.

Localisation part of wider sustainability push

Chandra placed localisation alongside a wider set of initiatives aimed at improving sustainability, reducing emissions and making India's automotive supply chain more resilient.

The industry has also moved to fully E20-compliant petrol vehicles, expanded electric vehicle adoption, supported CNG and LNG technologies, worked on vehicle recycling and scrappage and begun supporting green hydrogen pilots for buses and trucks.

“Alongside this growth, the industry has made significant strides in aligning [with] the global and national priorities of sustainability, decarbonization, and safety,” Chandra said.

The entire automobile industry shifted to manufacturing fully E20-compliant petrol vehicles from April 1, 2025, he said. Automakers have also started commercial launches and demonstrations of flex-fuel vehicles.

The move towards higher ethanol blending is intended to support the government's effort to reduce dependence on crude-oil imports and improve energy security.

EV registrations rise to 2.5 million

Electrification has also continued to gather pace. Chandra said total EV registrations in India reached 2.5 million units in FY26, up from 1.97 million units in FY25, representing growth of nearly 25%.

“The share of electric vehicles in the new vehicle fleet in most of the vehicle segments continued to grow in double digits for passenger vehicles, two-wheelers, and three-wheelers in FY 2025-26,” he said.

He said the PM E-Drive scheme has provided additional support to the transition.

SIAM is also supporting the expansion of CNG infrastructure and LNG technology, with Chandra describing LNG as a “viable solution for long-haul heavy trucks”.

The industry is simultaneously working with the government on pilot deployment of buses and trucks powered by green hydrogen.

Scrappage and recycling also in focus

Vehicle recycling forms another part of SIAM's sustainability programme.

Chandra said the industry is supporting the development of the recycling ecosystem and offering incentives to encourage the scrappage of older, more polluting and unsafe vehicles under the government's Vehicle Scrappage Policy.

The industry is also looking to partner with the government on the recently launched Parivartan scheme for scrapping older commercial vehicles through authorised or registered vehicle scrapping facilities in Delhi-NCR.

Localisation push follows record scale

The localisation effort comes as India's vehicle industry continues to expand both domestic sales and exports.

Passenger vehicle sales reached a record 4.6 million units in FY26, up 7.9%, while exports rose 17.5% to nearly one million units.

Two-wheeler domestic sales increased 10.7% to a record 21.71 million units, while exports rose 23.4% to 5.18 million units.

Three-wheeler sales grew 12.8% to around 8.4 lakh units, while exports jumped 50.1% to 4.6 lakh units.
Commercial vehicle sales reached a record 10.80 lakh units, up 12.6%, while exports grew 17.4% to around 95,000 units.

Chandra said the automotive sector's contribution to the Indian economy exceeded Rs 22.7 lakh crore, accounting for about 15% of the country's GST collections and supporting more than 30 million direct and indirect jobs.

He said SIAM will continue working with the government on a long-term roadmap for the automotive industry under the Automotive Mission Plan covering 2025 to 2047.

“The plan envisions a comprehensive roadmap for the auto sector, contributing significantly to India's aspiration of becoming a Viksit Bharat by 2047,” Chandra said.