At a time when global automakers are looking beyond China towards India for a reliable and best cost base, the Minister of Commerce and Industry Piyush Goyal said the Indian auto industry should target to increase their share of exports to at least 50 percent.
Speaking at an event in the National Capital on Friday to announce the Bharat Mobility Global Expo, Goyal said, “I was looking at the numbers and was told 14 percent of the vehicles made in India are exported, and the ambition is 25 percent. It should be at least 50 percent. Half the cars, commercial vehicles, two-wheelers, and electric vehicles that we make must go across the world.”
The Indian market is being looked at as an export hub, an alternative to China, by global players including Tesla and other Western automakers. Japanese automakers including Suzuki Motor, Nissan and Renault are also setting India as their export base.
In 2023, India surpassed Japan last year to become the third-largest automaker in the world.
“With our arbitrage on the scale, labour costs, technology skills and managerial talent, there is no reason India doesn’t have at least a 50 percent share of exports in our automobile sector. Unless we are ambitious in target or set audacious goals before ourselves, we will not achieve the extraordinary,” Goyal added.
The market leader Maruti Suzuki has already announced its plans to triple exports from India in the coming eight years. Almost every global car maker that has lined up electric vehicle launches for the Indian market plans to ship vehicles to overseas markets.
In fact, the much-awaited entry of Tesla in India is likely to bring in significant investment in local manufacturing capacities which is predominantly likely to be used for the global markets.
India also has a robust auto component ecosystem, which exported around Rs 1.61 lakh worth of components in 2022-2023. The auto components industry is expected to almost double its capital expenditure to over Rs 50,000 crore in the next five years amid ambitious capacity addition plans by automakers.
While the share of exports of passenger vehicles and commercial vehicles is still modest, the Indian two-wheeler makers — Bajaj Auto and TVS Motor Company export over 20-40 percent of their total output. The likes of Hero MotoCorp, Honda Motorcycle & Scooters India and Royal Enfield are aggressively building their overseas business by shipping vehicles from India.
Anand Mahindra, Chairman of Mahindra Group in his New Years message stated on X, that globally, the world needs India to become a reliable challenger to China’s supply chain dominance.
He believed that it is a ‘great opportunity of 2024,’ which will fuel the lift-off, and investment will flow into the country in unprecedented volumes, he stated.
He added that the opportunity for India’s manufacturing to achieve a quantum leap is ‘in our grasp,’ and said “We must seize it with both hands, because growth in manufacturing and exports will in turn, enhance the consumption story, setting into motion a virtuous cycle that could endure for years.”