India’s Auto Component Industry Aims to Double Share in Global Exports, Targets 5% in Next Few Years: ACMA

India’s auto component industry is targeting a more than doubling of its share of global component exports to 5%, as it seeks to move beyond supply-chain resilience and position the country as a global manufacturing and technology hub.

India currently accounts for around 1.8% of global auto component exports, and the Automotive Component Manufacturers Association of India (ACMA) believes the country has the opportunity to significantly increase its share amid shifting global supply chains, rising geopolitical uncertainty and growing demand for supply-chain diversification.

Shifting from Supply Chain Resilience to Global IP Ownership

Speaking at ACMA’s annual session, Vikrampati Singhania, Managing Director, JK Fenner, said the industry now needs to move from a defensive approach to a more aggressive growth strategy. “Resilience is one level of operation. But beyond it is where the next future and the next growth for India and Indian automotive and Indian automotive components will come from," he said.

Singhania said Indian suppliers need to build capabilities not only to manufacture for the domestic market but also to design products in India, develop intellectual property and serve global customers. “We need to now take the next step beyond being defensive. We need to play on the front foot. We need to start being able to do this for the world,” he said.

ACMA President and Managing Director at Brakes India, Sriram Viji said exports are already emerging as a key growth opportunity for Indian component makers, with suppliers increasingly diversifying both their customer base and geographical footprint. “Exports are growing. We've seen exports grow to most regions. So, that is an area where I think ACMA is spending a lot more time and energy is to see how to make India globally competitive in exports,” Viji said. He identified three critical pillars for export readiness: cost competitiveness, global quality and technology readiness.

Viji said ACMA is also increasingly helping smaller suppliers make the transition towards exports, with exports now being treated as a dedicated area within the association’s training and skilling initiatives. “What does it mean for a tier one or a tier two supplier in the component space to get into exports? So, it's getting them ready for that transition. So, that is going to be a big area of focus,” he said.

Building Domestic Scale

The push comes as the Indian component industry has recorded strong growth. According to Viji, the sector has grown at a 17% CAGR over the last five years, while the previous year alone saw growth of more than 13%. While India has a growing cost and talent advantage, industry leaders said scale will determine whether Indian suppliers can compete with established manufacturing hubs.

Viji said India’s large automotive market gives component manufacturers the ability to build scale, invest in technology and improve manufacturing processes before taking those capabilities to international markets. “India is a very large economy, but it's also got scale in the automotive sector across two-wheelers, it's the largest, number three in fast cars and SUVs, and number three in commercial vehicles. So, with that kind of scale comes the ability to invest, comes the ability to improve your processes, and get globally ready,” he said.

However, ACMA acknowledged that the challenge extends beyond large Tier-1 suppliers. Tier-2 suppliers will need to scale up both technologically and financially if India is to build a globally competitive component ecosystem. Viji said this would require improvements in both product technology and process technology, with greater knowledge-sharing between companies and stronger cluster-level programmes.

Technology Integration

Technology is emerging as another major pillar of India's export strategy, particularly as vehicles become increasingly software-defined and electronic.

BCG Senior Partner Saurabh Chhajer, who was involved in ACMA’s resilience study covering around 450 component companies, said increasing electronics, software and systems integration in vehicles creates an opportunity for Indian suppliers. “The quantum of integration, the quantum of electronics and the quantum of software going into vehicles is rising year on year. That's one clear opportunity for us,” he said.

India’s strength in software could also be leveraged to move beyond traditional component manufacturing. “India has, in general, been a software hub for the world and how do we take that capability and expand the role we play in software for the world is one clear opportunity area,” he said.

At the same time, he believes India has a window of opportunity in conventional internal-combustion-engine components as the country remains one of the few large automotive markets where ICE demand continues to grow. ACMA also plans to intensify efforts to localise technologies and components, particularly in areas such as electronics where India's ecosystem remains relatively nascent.

Joint SIAM-ACMA Drive to Cut Import Dependency

Viji said a joint SIAM-ACMA initiative is already working on identifying components and technologies that can be localised in India. “As we see technologies change, however, electrification, electronics becomes a much bigger portion and flex fuel becomes a bigger portion of vehicle sales. We do see the need to continue this journey to localize further and further,” he said.

The localisation push is expected to reduce import dependence while simultaneously creating capabilities that can eventually be exported. BCG's study found that companies that invested ahead of the curve in capabilities were better positioned to withstand disruption and deliver stronger financial performance.The key lesson, according to BCG, was that resilience was not simply about surviving disruption but investing before disruption happened.

For ACMA, the export ambition therefore goes well beyond shipping more components overseas. The industry wants Indian suppliers to evolve into global Tier-1 suppliers, technology developers and owners of intellectual property. Singhania said the shift in strategy as India moves from merely responding to global disruptions to actively capitalising on them: “We need to play on the front foot.”