In the dynamic landscape of India's automotive sector, the tension between globalization and nationalism is vividly apparent. As global trade dynamics evolve, India's automotive industry navigates a path combining local pride with international expansion, reshaping its role in the global market.
23 May 2025 | 1824 Views | By Balaji Pandiaraj, CX Lead, Ipsos India
As nations worldwide grapple with surging populism and protectionist policies, India stands at a unique crossroads. The country is striving to strike a delicate balance between its rich cultural heritage and the unstoppable march of global progress. This dichotomy is nowhere more evident than in the automotive sector, where India ...
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As nations worldwide grapple with surging populism and protectionist policies, India stands at a unique crossroads. The country is striving to strike a delicate balance between its rich cultural heritage and the unstoppable march of global progress. This dichotomy is nowhere more evident than in the automotive sector, where India is simultaneously embracing its role as a global manufacturing hub while nurturing its domestic industry. This transformation is playing out against a backdrop of global trade tensions, specifically by Trump administration's recent 25% import tariffs on cars and SUVs.
Indian consumers’ and manufacturers’ aspirations expanding in both directions
Recent data from the Ipsos Automotive Global Trends 2024 survey reveals a nuanced picture of Indian consumer sentiment. While acknowledging globalization as an inevitable force, Indians take immense pride in vehicles crafted and produced on their soil. For some, national pride translates into a preference for exclusively Indian products. Others view globalization as a gateway to accessing the world's best offerings. This split personality is mirrored in the evolving automotive market, where Indian buyers are increasingly recognizing the quality and value of domestically produced vehicles.
The "Make in India" campaign has been a game-changer, spurring both domestic and international OEMs to set up shop in the country. But the story doesn't end there. International OEMs are now viewing India not just as a market to serve, but as a strategic hub for global expansion. Take Skoda, for instance. The Czech automaker envisions its India-manufactured vehicles cruising the streets of North Africa, the Middle East, ASEAN countries, Australia, and New Zealand. Renault echoes this sentiment, with CEO Luca de Meo emphasizing their recent Chennai plant acquisition as a springboard for international growth.
These "Make in India for the World" initiatives represent more than just localized production. They embody a fusion of global expertise with local insights, resulting in vehicles that cater to both Indian and international tastes. This approach underscores India's evolving role in the global automotive landscape – from a significant market to a crucial manufacturing and innovation center with far-reaching influence.
Speed Breakers Ahead
However, the road ahead is not without its speed bumps. Geopolitical tensions can disrupt supply chains, leading to production delays and increased costs. The rise of nationalism could fuel protectionist trade policies, potentially hindering global automotive trade and investment.
Yet, India's diverse background, and cooperative and secular mindset position it uniquely in the global market. As the world's largest democracy and one of the most diverse developing countries, India's economic trajectory has captured global attention. The country's burgeoning demand for both conventional and electric vehicles has turned it into a strategic battleground for global automotive manufacturers.
In response to these global fractures, there's a growing emphasis on balancing global integration with local resilience. The key lies in finding equilibrium – harnessing the benefits of global scale and collaboration while nurturing local identities and economies.
As the Indian automotive sector continues its rapid transformation, it must focus on leveraging India's unique market potential. The challenge lies in navigating the tension between global cooperation and national pride, ensuring that neither obstructs the benefits of global collaboration.
Future Forward
Moving forward, India's automotive sector is poised to leverage its position as both a vast domestic market and an emerging global manufacturing hub. The industry must skillfully balance increased localization efforts with strategic global collaborations. This dual approach will allow the sector to showcase India's strengths on the world stage.
The key lies in developing products that not only cater to Indian consumers but also resonate globally. By tapping into India's rising purchasing power and diverse market potential, manufacturers can create vehicles that are both locally relevant and internationally competitive.
In conclusion, the Indian automotive industry stands at a pivotal moment, poised to redefine its global role. This journey represents more than just industrial advancement; it's a testament to India's ability to blend its rich cultural heritage with cutting-edge.
Balaji Pandiaraj is the Country Service Line Leader at Ipsos CX, India. Views expressed are the author's personal.