Accelerating Localization: India's Auto Component Industry and the 'Make in India' Push

The COVID-19 pandemic underscored the vulnerabilities of global supply chains, prompting Indian manufacturers to shift focus from global sourcing to regional suppliers.

This paradigm shift is driving localization-a key pillar of the "Make in India" initiativeand building a robust domestic supply chain for the auto component sector. "The remarkable strides in localization are critical to India's emergence as a globally preferred automotive hub," saysShradha Suri Marwah, President, ACMA, and CMD, Subros Ltd. "High-value components and advanced manufacturing practices have positioned us competitively despite geopolitical challenges."

Strengthening the Policy Framework

Government support through targeted policies has accelerated this transition. The Production-Linked Incentive (PLI) scheme, with a significant allocation of USD 7.8 billion for the automobile and auto components sector, underscores the intent to reduce import dependency and boost local manufacturing. Additionally, interest subsidies and investments in new equipment aim to modernise the industry while bolstering domestic innovation.

"The PLI scheme plays a pivotal role in fostering a cost-effective manufacturing base, which is up to 25% cheaper than Europe or Latin America," says Vinnie Mehta, Director General, ACMA. "This cost advantage, coupled with innovative localisation efforts, demonstrates our capability to lead sustainably," he avers.

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