India’s automotive industry must move beyond manufacturing technologies developed overseas and increasingly design and develop them domestically as the country seeks to become a global automotive technology and manufacturing hub, SIAM President Shailesh Chandra said.
Chandra, who is also Managing Director of Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, said the industry needs to invest more in research and development, engineering capabilities, intellectual property and manufacturing scale as new automotive technology ecosystems take shape globally.
“We should not aspire merely to manufacture globally developed technologies in India. We should increasingly aspire to develop technologies in India for the world,” Chandra said at the 66th annual session of ACMA.
He said the changing architecture of vehicles is increasing the importance of electronics, semiconductors, sensors, power electronics, batteries, motors, software, connectivity and advanced materials. India needs to ensure that a larger share of the value created from these technologies remains within the country, he added.
Government support through programmes such as the PLI-Auto scheme has created a foundation for advanced automotive technologies and deeper localisation, but industry will now have to make the investments required to build domestic capabilities, Chandra said.
“Government support can only create an enabling environment. The industry must take the next step by investing in R&D, engineering capabilities, intellectual property and manufacturing scale,” he said.
India’s large domestic automobile market gives component manufacturers an opportunity to develop and industrialise technologies at scale, according to Chandra.
He urged component makers to look beyond conventional parts and identify technologies where India could potentially build a global position, including power electronics, battery systems, electric motors, thermal management, sensors, control systems and lightweight materials.
Localisation Must Move up the Value chain
Chandra said India's localisation push must now focus increasingly on high-value and technology-intensive products after the progress made in conventional automotive components.
Recent disruptions involving critical minerals, particularly rare earths, have demonstrated how even relatively small components can expose the industry to strategic supply-chain risks, he said.
The government has started taking steps towards developing an integrated rare-earth permanent magnet ecosystem in India. But Chandra said the response cannot remain limited to a single component or raw material.
“We need a comprehensive approach covering raw materials, processing, components, sub-components and final systems,” he said.
OEMs and component makers will have to work more closely to provide suppliers with visibility on future technology requirements, develop domestic vendors and create enough scale to make local manufacturing viable.
“And it is important that we start now,” Chandra said.
From Import Substitution to Global Value Chains
Chandra said India's push for self-reliance should also not be confused with isolating itself from international supply chains. The goal, instead, should be to make India a preferred part of global automotive value chains.
“We should follow a simple principle: design in India, develop in India, manufacture in India and export from India,” he said.
A significant part of a product's value is created during the design and development stages, and India has an opportunity to capture more of it by leveraging the scale of its domestic vehicle market, he said.
Indian suppliers will therefore need to compete not only on cost but also on quality, technology, innovation and delivery performance.
“With the right ecosystem, India can serve both its rapidly growing domestic market and global markets seeking diversified and competitive vehicles and auto components,” Chandra said.
Scale creates opportunity
Chandra said the auto industry's recent growth has provided the scale required to pursue this ambition.
Passenger vehicle volumes reached 46.43 lakh units in FY26, while two-wheeler volumes rose nearly 11% to 2.17 crore units. Three-wheeler volumes increased nearly 13% to 8.36 lakh units, and commercial vehicle sales grew 12.6% to 10.80 lakh units, according to SIAM.
The first half of FY26 had remained relatively subdued, with several segments seeing low single-digit growth and some recording declines. Growth accelerated sharply following GST 2.0, exceeding 15-20% across categories in the second half and helping major vehicle segments end the year at record volumes.
The momentum has continued into FY27, with both domestic demand and exports remaining robust, Chandra said.
The automobile sector contributed around ₹22.75 lakh crore to the Indian economy in FY26, accounted for about 15% of GST revenue and supported nearly 30 million direct and indirect jobs. The auto-component industry, meanwhile, reached a turnover of around ₹7.6 lakh crore in FY26, including exports of about $24 billion.
“The opportunity before us is therefore much larger than just import substitution,” Chandra said.
India should aim to become one of the world's leading automotive manufacturing and mobility hubs, while ensuring that Made in India products are associated with quality, technology, reliability and global competitiveness, he said.
Skills Need to Catch up With Technology
Building technology capabilities will also require a corresponding shift in workforce skills, Chandra said.
The transition towards software-defined vehicles, electrification, advanced electronics, artificial intelligence and smart manufacturing will require large-scale capability building among engineers, technicians and the wider automotive workforce.
He called for deeper collaboration between industry, academia and government to create a pipeline of workers equipped for emerging automotive technologies.
“India's demographic advantage can become a decisive competitive advantage if we invest in building the skills that will power the next generation of automotive innovation and manufacturing,” Chandra said.
Sustainability to Influence Global Competitiveness
Sustainability will also increasingly influence India's ability to compete in global markets, Chandra said.
International customers are looking beyond vehicle technologies and examining the broader manufacturing footprint, including energy use, carbon intensity, materials, recycling, traceability and circularity.
“Sustainability will increasingly become a determinant of market access and competitiveness, particularly in export markets,” he said.
India has an opportunity to create automotive supply chains that are not only cost competitive but also low carbon, circular and compliant with global requirements, he added.
Chandra said India's automotive sector has already demonstrated its ability to withstand disruptions and rapidly scale manufacturing when demand increases. The next step should be to convert that resilience into global leadership.
That transformation will require collaboration between vehicle manufacturers, component suppliers, government, academia, technology companies and start-ups, Chandra said.
India's objective, he added, should no longer be limited to building resilient supply chains for its domestic market, but to create “globally competitive, technology-rich and sustainable automotive value chains from India”.
(With inputs from Kiran Murali, Prerna Lidhoo, Mugdha Mishra, Mukul Yudhveer Singh and Ketan Thakkar)