India’s rise in the global automotive supply chain is now a reality. It is strategic, structural, and accelerating. With steady investments in technology, capacity growth, and quality standards, the Indian auto component industry is becoming a key partner for global original equipment manufacturers (OEMs) as they adjust their supply chains and manage costs. A Strong Manufacturing Base Backed by Scale and Efficiency Tier 1 and Tier 2 suppliers in India are now increasingly certified to global standards like IATF 16949 and ISO 14001. This allows them to meet the needs of automotive hubs in Europe, North America, and Southeast Asia. The presence of skilled labour, strong connections in steel, casting, and electronics, and a lively MSME base add to India’s global appeal. The China+1 Opportunity Additionally, India’s active trade efforts through free trade agreements with the UAE, Australia, and others are helping open new markets for Indian component exports, especially in ASEAN and the Middle East. The EV Disruption: A Catalyst for Localisation India is moving beyond just manufacturing parts; it is also moving into design. Engineering R&D centres in Pune, Bengaluru, and Chennai are developing next-generation mobility technologies, often partnering with global OEMs. Challenges Remain, but the Direction is Clear Conclusion The question for global industry leaders is no longer whether India can deliver. It is about how quickly they can incorporate Indian capabilities into their future supply chain strategies.
India’s auto component industry achieved a record turnover of ₹5.6 lakh crore (around USD 69.7 billion) in FY2023. Exports alone surpassed USD 20 billion, according to the Automotive Component Manufacturers Association of India (ACMA). This growth stems from strong domestic demand, an enhanced supplier network, and India’s ability to deliver cost-effective, high-quality manufacturing on a large scale.
As global OEMs seek to reduce their dependence on Chinese supply chains, India is becoming a viable alternative. Multinational companies are strengthening their sourcing partnerships or setting up new facilities in India to localise supply for domestic and global demands. Firms like Bosch, Continental, and ZF have increased their presence in India, drawn not only by cost but also by engineering talent and supply chain stability.
The shift to electric vehicles is changing the component landscape worldwide, and India is adapting quickly. Battery management systems, motor controllers, lightweight castings, and software-driven components are now designed and manufactured in-house. The government’s Production Linked Incentive (PLI) schemes for auto components and advanced chemistry cells have further increased investment interest.
India still needs to tackle infrastructure issues, logistics efficiency, and energy costs to stay competitive. Also, achieving significant semiconductor localisation and building advanced materials is a long-term goal. However, the path is clear: India is now seen as more than just a low-cost supplier; it is recognised as a valued, reliable partner in the evolving global auto landscape.
The transformation of the Indian auto component industry from a local supporting base to a global powerhouse shows strategic planning, policy support, and entrepreneurial spirit. As OEMs adjust their sourcing strategies, India is prepared not just to be part of the global supply chain but to take the lead in certain areas.
Uploaded On: 
Author: 
