India's Auto Component Exports Experience Significant Growth in Recent Years
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Synopsis
India's auto component exports have surged significantly in the last few years, showcasing its growing role in the global market. Key export destinations include Germany, the US, and the UK, with potential growth to $100 billion by targeting specific product families and leveraging the electric vehicle sector.
Key Takeaways
- Exports of auto components from India have seen robust growth.
- Germany, Bangladesh, and the US are major export markets.
- India aims for $100 billion in exports with a focus on specific product categories.
- In FY24, exports reached $21.2 billion.
- India provides competitive pricing compared to other countries.
New Delhi, March 19 (NationPress) Highlighting India's expanding role in the global supply chain, the exports of auto components have experienced remarkable growth in the last two to three years.
Key export markets for motorcycle parts include Germany, Bangladesh, the US, the UK, the UAE, Brazil, Turkey, Sri Lanka, and others.
This underscores India's increasing presence in the global market and its decreasing reliance on imports.
Industry experts predict that India's auto component sector could aim for $100 billion in exports as global original equipment manufacturers (OEMs) reevaluate their supply chains and production strategies, providing India with a prime opportunity to emerge as a leading global hub.
In FY24, auto component exports hit $21.2 billion, representing an impressive recovery from a $2.5 billion deficit in FY19 to a $300 million surplus.
A recent report by the Automotive Component Manufacturers Association of India (ACMA) and Boston Consulting Group (BCG) indicates that India could potentially generate an additional $40-60 billion in exports by focusing on 11 product categories, particularly in the US and European markets.
Importantly, by leveraging the emerging electric vehicle (EV) and electronic value chain through localization, India could aim for an extra $15-20 billion in exports for components like battery management systems, telematics units, instrument clusters, and ABS.
Global OEMs comprise a significant portion of India's auto component industry, contributing 20-30 percent of exports.
In the German market, which is largely influenced by Eastern European suppliers, India presents itself as a cost-effective alternative, providing components at rates up to 15 percent lower.
In the US market, currently dominated by imports from Mexico and China, Mexico offers components at 2-5 percent lower prices due to reduced logistics and tariff costs. In contrast, Chinese components are 20-25 percent pricier compared to India, primarily due to additional tariffs.
