The Indian automotive industry is flourishing and the spine of the industry is its suppliers of auto-components and accessories which also forms an exclusive industrial segment. Solidiance's latest newspaper "Making India the 3rd largest global automotive components hub by 2026" show us the factors why India can be the 3rd largest global automotive compenent. All factors considered, and given the industry's robust growth, India is set to become the 3rd largest auto-components player in the world by 2026.
The India auto-component industry has experienced healthy growth of 14.3% CAGR (Compound Annual Growth Rate) from 2006 to 2016 and reached a level of USD 43.52 billion in the financial year between 2016-2017. All factors considered, and given the industry's robust growth, India is set to become the 3rd largest auto-components player in the world by 2026.
Evolution of India's Auto-components industry
India auto-components industry is predicted to grow and reach USD 200 billion by 2026, driven by recent developments in government policies and growth of FDI inflows in the auto sector. Strong growth in Aftermarket is also anticipated as Aftermarket is expected to reach USD 24 billion by 2020.
The industry is expected to grow by 8-10% in Financial Year (FY) 2017-2018 and is expected to register a turnover of USD 100 billion by 2020, according to the Auto Component Manufacturers Association of India (ACMA). The total value of India's auto component aftermarket was USD 8.4 billion in FY 2016-2017 and is expected to grow at a CAGR of 10.5%, reaching USD 13 billion by the year 2019-2020.
The Support System for Auto-component sector
- Incentive for Electric and Hybrid Vehicles: A reduction of excise duty, removal of time limit on duty exempor, reduction in basic customs duty
- R&D Incentives for Industry and Private Sponsored Research: A weighted tax deduction is given to industry and private sponsored research
- Export Incentives: Export promotion capital goods sceme, duty remission sceme, and Merchandise Exports from India Scheme.
- Area and Incentives: Each state in India is offering additional incentives for industrial projects
Advantages choose India Auto Component Industry
India is one of the fastest growing economics in the world and has emerged as one of the leading nations in terms of GDP growth rate and FDI inflows. India's geographically advantage closer to key automarkets, favorable policies and developing infrastructure are some of the major reasons for attracting foreign investorist this country.