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India’s Auto Component Sector Eyes USD 100 Billion Export Target, Reveals ACMA-BCG Report
Global OEMs are major customers of India's auto component industry, accounting for 20-30 percent of exports. BCG surveyed 40 Procurement professionals across leading CV OEMs, PV OEMs, and global suppliers to gauge their perspective on India as an auto component sourcing hub.
March 04, 2025. By Aishwarya

Boston Consulting Group (BCG) has launched its recent report titled ‘Revving Up Exports: The Next Phase of Export Growth for the Auto Component Industry’, emphasizing on how India's auto component industry is on the verge of a significant breakthrough, targeting USD 100 billion in exports, during the 59th ACMA Excellence Awards & 10th Technology Summit 2025 in New Delhi.
Shradha Suri Marwah, President at ACMA, emphasized, “We have not only achieved a positive trade balance, but for auto-specific use cases, the surplus is even more pronounced, reaching approximately USD 0.5 - 1.5 Bn. We are committed to sustaining this growth trajectory and have set an ambitious target of USD 100 Bn in exports ahead.”
The report presents a comprehensive, multi-faceted strategy to achieve this ambitious target. First, doubling down on classical components, India can potentially add another USD 40-60 Bn in incremental exports by prioritizing 11 product families detailed out in the report, with focus on US and Europe markets. Second, capitalizing on emerging EV & electronic value chain through localization today, India can look to tap into additional USD 15-20 Bn exports in components such as battery management systems, telematics units, instrument clusters, ABS.
A landed cost analysis of key auto components for 40 leading export nations, uncovers India's strong cost competitiveness. In the German market, which is predominantly influenced by Eastern European suppliers, India emerges as a cost-effective alternative, offering components at prices up to 15 percent lower. This cost advantage stems from India’s significantly lower productivity adjusted manpower and energy costs. In the US market, which is current dominated by imports from Mexico and China, Mexico offers components at 2-5 percent lower prices due to reduced logistics and tariff costs. Conversely, Chinese components are 20-25 percent more expensive vis-à-vis India, largely because of additional tariffs.
Global OEMs are major customers of India's auto component industry, accounting for 20-30 percent of exports. BCG surveyed 40 Procurement professionals across leading CV OEMs, PV OEMs, and global suppliers to gauge their perspective on India as an auto component sourcing hub. Interestingly, 80 percent of the CPOs are open to sourcing from Indian suppliers.
Vinnie Mehta, Director General at ACMA, underscored the importance of seizing the current growth phase, stating, "We are at a pivotal juncture, with immense potential to scale. To fully capitalize on this opportunity, major Indian players must aim to expand their exports by 5-10 times and achieve deeper penetration into global supply chains. This expansion necessitates building closer proximity to customers, enhancing testing and tooling capabilities, and gearing up for ESG compliance-key areas where ACMA can facilitate industry transformation.”
Vikram Janakiraman, Managing Director and Senior Partner at BCG, highlighted, "As geopolitical dynamics evolve, Global OEMs are reassessing their supply chains and manufacturing strategies, presenting India with an optimal opportunity to establish itself as a top destination for global OEMs and Tier 1s. Encouraging 2-3 global OEMs to establish manufacturing bases in India can serve as an anchor – helping the domestic auto component players to gain a deeper understanding of global OEM requirements, integrate more seamlessly into their supply chains, and enhance India’s position in the global auto component market."
Saurabh Chhajer, Managing Director and Partner at BCG, underscored the need for modernization and automation to fortify India's position in global trade, saying, "To emerge as a dominant global player, Indian companies must accelerate automation and advance towards Industry 4.0 standards. Leveraging India’s strength as a global center for digital solutions, along with AI integration can significantly enhance quality and scalability."
He further advocated, "We need to create advanced testing and validation centers under a PPP model to support MSMEs, ensuring that India’s exports consistently meet the global OEM standards."
The report identifies three key pillars to scale India's auto component exports. First, position India as a global automotive hub by encouraging global OEMs and Tier 1 suppliers to expand their operations, facilitated by coordinated central-state incentives and streamlined approval processes. Second, enhance testing and tooling capabilities across auto clusters leveraging automation, and expand upskilling programs. Third, advance design and innovation capabilities by establishing tech parks and innovation accelerators, while also building industry readiness for sustainability.
Shradha Suri Marwah, President at ACMA, emphasized, “We have not only achieved a positive trade balance, but for auto-specific use cases, the surplus is even more pronounced, reaching approximately USD 0.5 - 1.5 Bn. We are committed to sustaining this growth trajectory and have set an ambitious target of USD 100 Bn in exports ahead.”
The report presents a comprehensive, multi-faceted strategy to achieve this ambitious target. First, doubling down on classical components, India can potentially add another USD 40-60 Bn in incremental exports by prioritizing 11 product families detailed out in the report, with focus on US and Europe markets. Second, capitalizing on emerging EV & electronic value chain through localization today, India can look to tap into additional USD 15-20 Bn exports in components such as battery management systems, telematics units, instrument clusters, ABS.
A landed cost analysis of key auto components for 40 leading export nations, uncovers India's strong cost competitiveness. In the German market, which is predominantly influenced by Eastern European suppliers, India emerges as a cost-effective alternative, offering components at prices up to 15 percent lower. This cost advantage stems from India’s significantly lower productivity adjusted manpower and energy costs. In the US market, which is current dominated by imports from Mexico and China, Mexico offers components at 2-5 percent lower prices due to reduced logistics and tariff costs. Conversely, Chinese components are 20-25 percent more expensive vis-à-vis India, largely because of additional tariffs.
Global OEMs are major customers of India's auto component industry, accounting for 20-30 percent of exports. BCG surveyed 40 Procurement professionals across leading CV OEMs, PV OEMs, and global suppliers to gauge their perspective on India as an auto component sourcing hub. Interestingly, 80 percent of the CPOs are open to sourcing from Indian suppliers.
Vinnie Mehta, Director General at ACMA, underscored the importance of seizing the current growth phase, stating, "We are at a pivotal juncture, with immense potential to scale. To fully capitalize on this opportunity, major Indian players must aim to expand their exports by 5-10 times and achieve deeper penetration into global supply chains. This expansion necessitates building closer proximity to customers, enhancing testing and tooling capabilities, and gearing up for ESG compliance-key areas where ACMA can facilitate industry transformation.”
Vikram Janakiraman, Managing Director and Senior Partner at BCG, highlighted, "As geopolitical dynamics evolve, Global OEMs are reassessing their supply chains and manufacturing strategies, presenting India with an optimal opportunity to establish itself as a top destination for global OEMs and Tier 1s. Encouraging 2-3 global OEMs to establish manufacturing bases in India can serve as an anchor – helping the domestic auto component players to gain a deeper understanding of global OEM requirements, integrate more seamlessly into their supply chains, and enhance India’s position in the global auto component market."
Saurabh Chhajer, Managing Director and Partner at BCG, underscored the need for modernization and automation to fortify India's position in global trade, saying, "To emerge as a dominant global player, Indian companies must accelerate automation and advance towards Industry 4.0 standards. Leveraging India’s strength as a global center for digital solutions, along with AI integration can significantly enhance quality and scalability."
He further advocated, "We need to create advanced testing and validation centers under a PPP model to support MSMEs, ensuring that India’s exports consistently meet the global OEM standards."
The report identifies three key pillars to scale India's auto component exports. First, position India as a global automotive hub by encouraging global OEMs and Tier 1 suppliers to expand their operations, facilitated by coordinated central-state incentives and streamlined approval processes. Second, enhance testing and tooling capabilities across auto clusters leveraging automation, and expand upskilling programs. Third, advance design and innovation capabilities by establishing tech parks and innovation accelerators, while also building industry readiness for sustainability.
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