The auto components manufacturer industry in India is categorized into two sectors. The high-value precision instruments come under the category of the organized sector. It refers to original equipment manufacturers (OEMs). Whereas, the low-valued products are manufactured under the unorganized sector and cater to after-market services. There are various sub-sectors of the auto components manufacturer in India such as drive transmission, engine parts, steering parts, body, chassis, suspension, braking parts, equipment, electrical parts, and others such as die-casting, fan belts, and sheet metal parts. There has always been a trade deficit in India’s auto components sector as the import is more than the export. However, recently this industry saw a significant trade surplus of $700 million in FY22. Some of the factors have made India a profitable destination for investment. Factors for its growth are as follows:
1. A strong and stable government framework
that has increased purchasing power.
2. The growing domestic market has
also contributed to the above fact.
3. Ever-increasing development n infrastructure
has also increased.
Many important markets such as Japan, Korea,
ASEAN, and Europe and huge domestic markets are geographically closer to our
country, making it suitable for others to invest in it. All these markets
now see India as an emerging global hub with better opportunities for investing
in its auto component industry. As India offers lower costs than Europe and Latin America,
it is cost-competitive. Moreover, there are very less restrictions on
export-import in India which makes it a suitable trade policy. There is a large
expansion in the middle class and working population which is likely to remain
a key demand driver. The government of India is also providing good financial
support to this industry.
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