India’s Auto Components Exports Can Triple By 2030, NITI Aayog Says

NITI Aayog, the Centre's topmost think-tank, sees India’s auto component exports growing by three times by 2030, even as the wider industry undergoes a wholesale transformation. That’s possible only by targeted policy initiatives.

“This report envisions India advancing to approx. $145 billion in automotive component production by 2030, with auto component exports expected to triple from $20 billion to $60 billion during this period,” NITI Aayog said in the executive summary to the report titled ‘Powering India’s Participation In Global Value Chains - Automotive Sector’, released on Friday.

“This growth would position India as a formidable player in the global markets, achieving a trade surplus of ~$25 billion and increasing its share in the global value chain (GVC) of auto components from 3% to 8%,” the summary went on to say. “Such progress is projected to generate 2-2.5 million additional large-scale employment opportunities, bringing the total direct employment in the sector to 3-4 million people.”

“However, realising this ambitious vision will require strategic and focused policy initiatives to enhance competitiveness, improve infrastructure, and attract investment in high-value automotive manufacturing.”

The global auto-component industry was valued at $2 trillion in 2022. Of this, around 30%, or $700 billion were exports. Despite being among the top-five global auto markets, India’s share of auto-component trade stands at only 3%, or about $20 billion. On top of that, India imports nearly as much, resulting in a near-neutral trade ratio of 0.99.

“This balance suggests that India’s auto-component trade remains largely self-contained, with exports and imports nearly offsetting each other,” NITI Aayog said.

NITI Aayog suggests a clutch of policy interventions—fiscal and non-fiscal—to achieve a trade surplus of $25 billion by 2030. These include cluster development to strengthen the supply chain and free trade agreements to foster market access.

“Timely and effective implementation of the recommended reforms and initiatives presents a promising and powerful pathway for India to enhance its global value chain salience in the automotive sector,” it said. “This, in turn, will drive accelerated economic growth, income generation, and job creation, while strengthening the supply chain ecosystem and ancillary industries.”