A promising future awaits India’s automotive industry, with its potential direction set to touch new heights. A recent study by the esteemed global consulting firm, Arthur D. Little, suggests that with a strong foundation in manufacturing, innovation, and technology, India’s automotive sector can soar to a $1 trillion export-driven powerhouse by 2035.
This report sheds light on India’s ability to harness an impressive additional revenue of $400 billion by 2035, surpassing the expected trajectory of $600 billion. The pillars of this expected growth are strategic exports, adept technological adoption, and consistent innovation.
To transform this vision into reality, it’s imperative for Indian automotive entities to amplify their global outreach and production quality. Its ultimate goal is to craft vehicles that cater to diverse global markets, including those of developed nations.
Dr. Andreas Schlosser, Global Automotive Leader at Arthur D. Little, foresees multinational corporations bolstering their manufacturing and sourcing ventures in India. He observes, “Indian players could become global champions with a significant international presence as the global industry gets disrupted by megatrends.”
By 2030, the global automotive Engineering Research and development (ER&D) and software sectors are projected to triple their current size, reaching an impressive $400+ billion. Given India’s reputation as a premier software and ER&D destination, the country is well-positioned to capitalize on this growth.
Yet, this optimistic path does come with challenges. To stay ahead, automotive companies in India need to swiftly adapt to emerging global trends and enhance their product portfolios. “India’s strength in automotive software and ER&D can thrive by offering solutions aligned with emerging trends like zonal architecture and Advanced Driver Assistance Systems (ADAS). India has the potential to be an automotive innovation leader, with a thriving well-funded startup ecosystem,” says Barnik Chitran Maitra, Managing Partner at Arthur D. Little for India & South Asia.
Highlighting the international trust in India’s automotive capabilities, Commerce Minister Piyush Goyal recently shared an update on Tesla’s procurement plans. The electric vehicle giant aims to import auto components worth an ambitious $1.9 billion from India this year, marking a significant increase from last year’s $1 billion.
But the journey isn’t just about economic growth. The report emphasizes that for a sustainable future, Indian automotive firms need to adopt eco-friendly practices. This includes a focus on lightweight materials, lithium battery recycling, and the utilization of eco-friendly resources like secondary aluminum and green steel.
As the global focus shifts towards sustainable transportation and innovative technologies, India’s automotive narrative is shaping up to be one of growth, challenges, and a commitment to a greener future.
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