Indian automobile industry saw a great impact owing to the policy leapfrogging (BSIV to BSVI), abrupt diesel bans and thrust towards electric vehicles. Further, due to the economic slowdown, auto industry sales in FY20 declined and a recovery to a pre-COVID-19 scenario is expected only around FY22-23. To add to this the tech-led disruptions from cab aggregators, fluctuations in interest rates and reduced liquidity in NBFCs led to a substantial slowdown in the industry.
Auto-components segment in India is estimated at USD48 bn industry and expected to grow at a CAGR of 27 per cent1 in years to come. The Automotive Mission Plan 2016-26 targets 3X growth for automotive industry and establishes India as a manufacturing base and an export hub. The plan also seeks to outline the trajectory of advancement of the auto-ancillary ecosystem in India.
Invest India website accessed on 27 August 2020
Central and state governments have introduced multiple policies and financial incentives to drive the growth in the auto-component industry. India is well positioned to be an alternative source of supply to the global auto-component industry with 100 per cent FDI, cost advantages and incentives.
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