Automotive Industry: Powering India’s Participation in Global Value Chains

Automotive Industry: Powering India’s Participation in Global Value Chains: NITI Aayog has recently released a report titled "Automotive Industry: Powering India’s Participation in Global Value Chains.

• The report provides an extensive analysis of India’s automotive sector, highlighting opportunities, challenges, and a roadmap for integrating India into global automotive markets.
• About Automotive Industry Landscape in India: 4th largest automobile producer globally, with 28 million vehicles manufactured in 2023–24 across all segments.

o Export Trends: Auto component exports stood at $20 billion in 2023, accounting for 3% of global trade; target set to reach $60 billion by 2030.

o Domestic Demand: Rising middle class and policy support are fueling demand for EVs and small cars.

o Trade Balance: Auto component trade ratio is 0.99, indicating near balance but untapped export potential.

o Policy Support: Key schemes include PLI, FAME-II, PM E-Drive, and ACC Battery Storage, aiding manufacturing scale-up.

• Importance of Automotive Sector in Indian Economy

o GDP Contribution: Contributes 7.1% of India’s GDP and nearly 49% of manufacturing GDP.

o Sectoral Linkages: Strong linkages with steel, rubber, electronics, glass, and IT.

o Employment Potential: Potential to add 2–2.5 million new jobs by 2030.