India's Auto Industry Expected To Rise To Third Rank Globally By 2030

The Indian Government has announced the country's automotive industry is on track to secure the third position in the global ranking by 2030. This projection is backed by a series of strategic initiatives, including the Rs 25,938 crore Production Linked Incentive (PLI) scheme for Automobile and Auto Components.

The Ministry of Heavy Industries (MHI) is taking steps to evaluate the effectiveness of the Production Linked Incentive - Auto Scheme. To this end, a conference was scheduled, under the chairmanship of Heavy Industries Minister Mahendra Nath Pandey. The central focus of this meeting was to assess the performance of the scheme and identify potential opportunities.

Key participants in the conference encompassed PLI-Auto applicants and test agencies, among other stakeholders. Their insights, experiences, and solutions will be crucial in addressing the challenges faced by the automotive industry and harnessing the full potential of the PLI scheme. The Ministry of Heavy Industries emphasizes the role of PLI-Auto applicants as pivotal stakeholders in this scheme. Recognizing their significance, the ministry underscores the cascading benefits of these initiatives on the growth of the automotive industry. The ultimate vision is for India's automotive sector to ascend to the third position globally by 2030.

Integral to this growth trajectory is the aspiration for deep localization and the development of Advanced Automotive Technology (AAT) products within India. The government underscores that achieving these goals is intrinsically tied to the support and expansion of the automotive industry. India's automotive sector is a cornerstone of the nation's economy, generating substantial forward and backward linkages. Its contributions are manifest in its robust impact on growth indicators. The sector's contribution to the national GDP has surged from 2.77 percent in 1992-93 to approximately 7.1 percent. Moreover, this industry directly and indirectly employs more than 19 million individuals.

Analysing the market composition, two-wheelers and passenger cars dominated the Indian automobile market during 2021-22, claiming 77 percent and 18 percent market share, respectively. Within the passenger car segment, small and mid-sized cars remain at the forefront of sales. India's ambitions extend beyond global rankings, as the country aims to elevate the size of its auto industry to Rs 15 lakh crore by the close of 2024. Notably, the industry has witnessed a significant inflow of Foreign Direct Investment (FDI), amounting to USD 33.77 billion, from April 2000 to September 2022. This comprises approximately 5.48 percent of the total FDI inflow into India during the same period.

With inputs from PTI