INDIAN AUTO ANCILLARY: FROM BACK- STAGE TO GLOBAL STAGE

The Indian auto ancillary industry, crucial for the country's automotive industry, is poised for significant growth, driven by rising domestic demand, favourable government policies, and a shift towards electric vehicles

- Srinjoy Bal

While much of the attention in the Indian automotive sector goes to the shiny vehicles rolling off assembly lines, a much larger and more seismic change is taking place behind the curtains.

The auto ancillary industry, which has been the longstanding backbone for vehicle production in India, is now taking centre stage as an architect for the global mobility ecosystem, not just as the supplier of the assembly line. Driven by a mix of government policy, a buoyant domestic market and shifting global supply chains, the Indian auto component sector is no longer confined to being just a supplier. It is becoming a global hub for manufacturing, innovation, and exports. Emerging into a paradigm shift is another page in India's book in the global automotive arena, with the industry moving from being a supporting character in the global auto market to playing a leading role.

The Automotive Component Manufacturers Association of India (ACMA) has reported turnover of $ 80.2 billion for the industry in FY25, representing a year-on-year increase of 9.6 per cent. In perspective, the sector has doubled its size over the last five years, sustaining a healthy CAGR of 14 per cent. Going forward, in line with the Automotive Mission Plan (AMP), the projections point towards a contribution of 5-7 per cent of GDP in coming years with a long-term valuation target of USD 220 billion.