Key Points
India transforms from $2.5 billion deficit to $300 million surplus
Global OEMs increasingly sourcing components from India
Competitive pricing makes India attractive manufacturing destination
Also, major exports destinations for motorcycle parts are Germany, Bangladesh, the US, the UK, the UAE, Brazil, Turkey, Sri Lanka and others.
This highlights India's increasing global market presence and reduced dependence on imports.
According to industry experts, India's auto component industry can target $100 billion in exports, as global original equipment manufacturers (OEMs) reassess their supply chains and manufacturing strategies, presenting India with an optimal opportunity to establish itself as a top global destination.
The auto component exports reached $21.2 billion in FY24, marking a significant turnaround from a $2.5 billion deficit in FY19 to a $300 million surplus.
According to the latest report by Automotive Component Manufacturers Association of India (ACMA) and Boston Consulting Group (BCG), India can potentially add another $40-60 billion in incremental exports by prioritising 11 product families, with focus on US and Europe markets.
Notably, capitalising on emerging EV and electronic value chain through localisation today, India can look to tap into additional $15-20 billion exports in components such as battery management systems, telematics units, instrument clusters and ABS.
Global OEMs are major customers of India's auto component industry, accounting for 20-30 per cent of exports.
In the German market, which is predominantly influenced by Eastern European suppliers, India emerges as a cost-effective alternative, offering components at prices up to 15 per cent lower.
In the US market, which is current dominated by imports from Mexico and China, Mexico offers components at 2-5 per cent lower prices due to reduced logistics and tariff costs. Conversely, Chinese components are 20-25 per cent more expensive compared to India, largely because of additional tariffs.
