India's Auto component exports surge to $21.2 billion in last 2-3 years

Auto component exports have seen strong growth over the last few years due to India's growing importance in the global supply chain. The major destinations for exporting motorcycle parts made in the country include Germany, Bangladesh, US, UK, UAE, Brazil, Turkey and Sri Lanka and other countries. Auto component exports from the country reached $21.2 billion in FY 2023-24, marking a significant change from a deficit of $2.5 billion in FY 2018-19 to a surplus of $300 million.

Industry insiders believe that India's auto component industry can achieve the target of $100 billion exports as global Original Equipment Manufacturers (OEMs) re-evaluate their supply chains and manufacturing strategies, giving India a good opportunity to establish itself as a top global destination.

According to a recent report by the Automotive Component Manufacturers Association of India (ACMA) and Boston Consulting Group (BCG), India could potentially generate an additional $40-60 billion in exports by prioritising 11 product families focusing on the US and Europe markets.

The report further noted that by leveraging emerging EVs and electronic value chains through localisation, India can export an additional $15-20 billion by manufacturing components such as battery management systems, telematics units, instrument clusters and ABS. Global OEMs are the major customers of India's auto component industry, accounting for 20-30 per cent of exports.

India is emerging as a cost-effective option in the German market, dominated by Eastern European suppliers, offering auto components at prices as low as 15 per cent. Currently, the US market is dominated by auto components imported from Mexico and China. Mexico offers auto components at a 2-5 percent lower price due to lower logistics and tariff costs. In contrast, Chinese components are 20-25 per cent more expensive than India's, mainly because of additional tariffs.