The Indian automotive sector has been able to establish its indigenous manufacturing and expand the overall manufacturing process to such an extent that most manufacturers who once used to import CKD’s and CBU’s now rather seek opportunities to produce in India. The Make in India program has been an integral force behind such changes, such plans have boosted India’s car production and beyond that further paved the way for EV vehicle, Powertrain, and ancillary manufacturing sector.
Reports and studies have indicated how policy reforms in the last decade have led to such a change. These policy changes include fiscal changes as well and infrastructure development. India has been a key player in the global automobile sector. In fact, the market has been able to attract substantial investments. Beyond added investments, the market has been able to increase localised or indigenous economic growth and sustainability.
Being receptive to the journey the industry has had after opening up to global manufacturers in 1991, the market allowed for FDI and Foreign Investments into the automobile sector. The investment-conducive nature of the nation has been due to increased sales and easier and more affordable production opportunities for manufacturers. India has been able to maximise the potential of its massive man-power and the capability to provide the components integral to the production.
As per the details released the production of the vehicle has increased From 2 Million in 1991-92 to around 28 million in 2023-24. In fact, the overall turnover is believed to be around US$ 240 billion. The best part is that overall changes have been able to boost employment for around 30 million.
Current Manufacturing Status
Today, India is the largest manufacturer of three -Wheelers, its among the top two manufacturers of two-wheelers in the world. Beyond just manufacturing cars the real challenge has been with the manufacturing of components and parts. India has been able to move ahead and manufacture key components that are in demand in international supply chains. The broad spectrum of ancillaries that the Indian market has been producing has ensured that India has become one of the notable markets for manufacturing parts and EV powertrains. The parts that have been able to record massive sales have been- Brake systems, Electrical Electric components, Body, and Chassis Parts.
As per the trends and forecast it has become apparent that the auto component manufacturing sector would reach an evaluation of a US$100 billion export target by 2030, such numbers would ensure that the employment that the sector provides increases as well.
The Overall addition that the Automotive sector has added to the GDP is around 2.3 % . And with the positive forecasts that have bene established have further increased the possible chances for better GDP growth and development.
Strides In The EV Manufacturing Sector
As of yet, the EV manufacturing market stands at 4.4 million EV’s registered till August 2024. Government programs such as the Production Linked Incentive scheme have been able to equip the market with a enabling and conducive environment for further production. The advanced production of new Innovative technologies for Ev production.
. In the last union budget the Government allocated about Rs 2,671 crore under the scheme and proposed exempting custom duties from importing critical materials that are of integral importance for producing EV cells. The Manufacturing of EVs in India has showcased a constant increase over the years, in 2023 it was around 9,217 for passenger vehicles and in case of commercial vehicles, it was around 8,660. Its possible that the government might launch new policies that would further help the market be more conducive towards increased manufacturing and FDI investments.
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