India’s next auto leap is beyond the factory floor

Hyundai Motor India's MD and CEO Tarun Garg emphasized on Wednesday that India must advance beyond manufacturing scale and swiftly develop domestic expertise in advanced fields such as semiconductors, EV battery cells, and power electronics. Addressing the 66th Annual Session of the Automotive Component Manufacturers Association of India (ACMA), Garg stated that while India's automotive sector has established a robust manufacturing foundation and proven resilience amid multiple disruptions, the subsequent stage should aim to convert this resilience into global leadership.

In FY2025-26, India exported auto components valued at approximately USD 24 billion, while imports amounted to around USD 25.4 billion, resulting in a trade deficit of around USD 1.4 billion. Garg highlighted that exports are currently centered around more mature technologies, whereas imports are dominated by advanced, higher-value technologies that could shape the future.

Garg emphasized that the challenge extends beyond merely addressing the trade deficit, stressing that India must cultivate the necessary technology, manufacturing capabilities, employment opportunities, and global competitiveness to support the country's vision of Viksit Bharat by 2047. The opportune time has arrived to deliberate on how to scale up skills, capabilities, volumes, and revenues, moving from resilience to leadership.

He underscored India's economic growth and automotive sector expansion since 1996, noting that GDP has risen from about USD 393 billion to USD 4.15 trillion, while the passenger vehicle market has surged from fewer than half a million units to over 4.7 million units during the same period. Despite COVID-19, semiconductor shortages, logistics challenges, wars, and ongoing geopolitical uncertainties, India's supplier ecosystem has remained resilient through successive disruptions.

Garg stated that while the industry has adeptly managed disruptions, the focus should now transition from handling them to building capabilities that can grant India a sustainable competitive edge. Although India has achieved scale, it is now crucial to accelerate and leapfrog toward greater self-reliance by developing domestic competencies in designing, developing, and manufacturing future technologies, including semiconductor chips, EV battery cells, power electronics, and more.

Garg outlined four priorities for India's auto-component industry: mastering critical technologies, optimizing costs, compounding learning, and boosting export competitiveness. He advocated for a shift from "Make in India" to "Design in India, Engineer in India, and Create in India," urging government, automakers, component suppliers, academia, and startups to collaborate in building domestic technology and intellectual property.

The industry should concentrate on localizing critical imports, generating Indian patents, entering global markets, and integrating artificial intelligence across operations. Garg concluded by asserting that India's scale, engineering talent, and cost competitiveness can be harnessed to establish a unique global advantage, with the emphasis now shifting towards delivering high-quality and affordable technologies from India to the world.