In iPhone-like push for auto-component exports, govt bats for quality for a bigger play in global supply chain

India wants to replicate the export-scale momentum achieved in smartphones.

• India aims to boost auto-component exports by aligning with global standards
• Govt consults industry to address certification and market access bottlenecks
• Auto components seen as key to India's export-led manufacturing growth

Did our AI summary help?

India is positioning auto-component exports as the next engine of major manufacturing-led growth by replicating the success of its iPhone and electronics model, government sources said.

The government is pushing for global standards so that local manufacturers can integrate easily into value chains dominated by Mexico and networks linked to Japanese and United States firms.

“India has reached a cumulative export milestone of 50 billion dollars’ worth of iPhones. The objective now is to build a similar export success story in auto components. For that, standards, quality and production capability have to match global benchmarks,” a senior government source told Moneycontrol.

While global automotive demand is about $2.2 trillion, India’s total contribution was just $30 billion, roughly 1.4 percent, a NITI Aayog report said.

Geography is not the main constraint, the source said. “Logistics or location is not the biggest cost in this sector. The real competitiveness challenge lies in production efficiency. If we improve productivity and align standards, integration into global supply chains will follow,” the source said.

Consulting the industry

Despite rising domestic manufacturing, India’s share of global auto-component exports remains modest.

Indian firms have a limited presence in European markets, where certification, technical standards and compliance requirements are higher, sources said.

The government recently held consultations with leading private-sector manufacturers to understand their problems better.

“We met key industry players to identify gaps in technology, testing and documentation. The intent is to remove friction points that restrict companies from exporting at scale,” the source said.

Viksit Bharat pathway

The policy approach frames exports as central to the Viksit Bharat growth vision. The government believes that major economies such as Japan and the United Kingdom have strengthened their manufacturing ecosystems through export-driven models and India must follow a similar path.

“Without strong export growth, it will be difficult to achieve long-term development ambitions. Auto components can create jobs, deepen supply chains and attract global manufacturers to India,” the source said, adding standard harmonisation would be a key reform priority.

Sources also said that integrating with global automotive supply chains centred around Mexico will help Indian firms participate in larger production networks that serve North American and other international markets.

Auto components seen as export growth engine

If India is able to align standards, improve productivity and upgrade manufacturing systems, policymakers believe that auto components could emerge as a significant export category.

The effort is aimed at building scale, attracting investment and strengthening India’s position in global manufacturing networks, similar to the trajectory seen in electronics exports.

The need for an export leap comes against a backdrop of a skewed automotive export mix and sluggish growth in finished vehicle shipments.

India’s share of global exports grew slowly between 2015 and 2024, rising from $9.4 billion to $13.2 billion at a compound annual growth rate of about 3.5 percent.

Although auto-component exports nearly doubled during the period, expanding at around 8 percent annually, India’s share in global component demand remains around 2 percent, the think-tank said.