MUMABI: The Indian automotive industry has recently reached a significant milestone by surpassing the Rs20 trillion mark in the fiscal year 2024.
The achievement was announced by Vinod Aggarwal, the President of the Society of Indian Automobile Manufacturers (SIAM), during the 64th annual session of the Automotive Component Manufacturers Association of India (ACMA).
The remarkable growth underscores the industry’s vital role in India’s economic landscape, contributing approximately 14-15 per cent to the country’s total Goods and Services Tax (GST) collection. Such figures not only highlight the industry’s robust performance but also its potential for future growth and development.
Aggarwal emphasised the automotive sector’s substantial contribution to both direct and indirect employment generation in India. As the industry continues to flourish, it is poised to increase its contribution to the national Gross Domestic Product (GDP) beyond the current 6.8 per cent.
This is particularly significant as the country aims for an ambitious vision of Viksit Bharat (Developed India) by the year 2047. The automotive industry is not merely a contributor to economic statistics; it is a catalyst for job creation and a driver of technological innovation.
The transformation of the automotive sector is intricately linked to its technological advancements. Aggarwal proudly noted that India has emerged as the third-largest passenger vehicle market globally, the largest market for two and three-wheelers, and the third-largest commercial vehicle market.
Reducing import dependence
The growth is indicative of the increasing domestic demand and the industry’s ability to adapt to changing consumer preferences. As India marches towards its goal of becoming a developed nation, the automotive industry stands at the forefront of this transformation.
A critical aspect of the industry’s future lies in its commitment to reducing import dependence. Aggarwal revealed that the sector has identified 50 essential components for domestic production, with an ambitious target to reduce import content from 60 per cent to 20 per cent by 2025, based on the levels of 2019-20.
The initiative aims to decrease imports by Rs20,000-Rs25,000 crore over the next five years, thereby reinforcing the industry’s commitment to self-reliance and indigenous manufacturing.
Enhancing local manufacturing
The collaboration between SIAM and ACMA has been instrumental in enhancing local manufacturing capabilities. The successful completion of the first phase of import reduction, achieving a 5.8 per cent decrease in two years, is a testament to the industry’s proactive approach.
Aggarwal’s encouragement for ACMA members to commence manufacturing critical components in India reflects a strategic shift towards localization, enabling Original Equipment Manufacturers (OEMs) to source materials domestically.
Furthermore, the automotive industry is making significant strides in developing powertrain technologies, including compressed natural gas (CNG), electric vehicles (EVs), and hybrids. Aggarwal also highlighted the ongoing research in hydrogen and fuel cell technologies, emphasizing the need for cleaner and safer vehicles as the aspirations of the nation evolve.
The industry’s focus on sustainability aligns with global trends and positions India as a responsible player in the global automotive market.
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