India’s auto component industry

India’s auto component industry

FDI foreign direct investment had profited India so much by investing in India as India companies had less investment and high profit and there are so much profitable business ideas in India. These are some good points that why invest in India’s auto component industry.




Size of the Indian Auto Component Industry is around USD 43.5 billion (2016-17) and contributes 2.3% to India’s Gross Domestic Product (GDP).Auto Component Industry enlisted a Compound Annual Growth Rate (CAGR) of 7% more than 2011-12 to 2016-17 ,Indian auto part industry is relied upon to enrol a turnover of USD 115 billion by 2020-21 and USD 200 billion by 2026.In the last monetary year, the auto segment sends out contributed 4% to India’s general exports. Exports expanded to USD 10.90 billion of every 2016-17.Domestic Aftermarket in 2016-17: USD 8.4 billion. The industry is anticipated to be the third biggest on the planet by 2025.




An developing worldwide center for sourcing auto components. Geographically nearer to key car markets like the ASEAN, Japan, Korea, Europe and enormous local market. Cost focused when contrasted with other assembling nations. India offers a lessened cost by 10-25 percent in respect to that offered by Europe and Latin America.Favorable exchange arrangement with insignificant limitations on trade import. What’s more, particular motivators are accessible for send out situated units and fare preparing zones. India’s expanding mix in Global Value Chains to additionally give force to the sector.Favorable government strategy with 100% FDI permitted through programmed route. Presence of empowering framework like car preparing organizations and auto configuration focuses, unique auto parks and virtual SEZs for auto components Fastest developing significant economy on the planet with GDP development rate of over 7%.A developing working populace and an extending white collar class are required to stay scratch request drivers. The nearness of a huge pool of talented and semi-gifted workforce and a solid instructive system. Increased interests in R&D tasks and research facilities, which are being set up to direct exercises, for example, examination, recreation and building animations. The development of worldwide Original Equipment Manufacturers (OEMs) sourcing from India and the expanded indigenisation of worldwide OEMs is transforming the nation into a favoured outlining and assembling base.




Indian auto-segment industry is set to end up the third biggest on the planet by 2025.Indian car division enlisted a turnover of USD 43.5 billion of every 2016-17 , and is relied upon to achieve USD 115 billion by 2020-21. Furthermore, USD 200 billion by 2026.Indian Auto part Industry enrolled a CAGR of 7% more than 2011-12 to 2016-17.Auto segments sends out from India represent 4% of aggregate India’s fares, and in 2016-17, Indian fares remained at USD 10.90 billion. Industry trades are anticipated to achieve USD 30 billion by 2020-21, additionally ascending to USD 80 billion by 2026.Exports of auto segments developed at a CAGR of 11% over the period 2011-12 to 2016-17. Significant fare markets are: USA (22%), Germany (7%) and Turkey (6.2%).The residential reseller’s exchange for auto segments remains at USD 8.4 billion out of 2016-17.Contribution of Auto Component Industry in India’s GDP will record to as much as 5% to 7% by 2026. At display, the part contributes 2.3% to India’s GDP.The industry at present utilizes 1.5 million individuals straightforwardly and 1.5 million by implication. Further, Automotive Mission Plan (2016-26) conceives to give guide incremental work to 3.2 million by 2026.Realization of objectives in Automotive Mission Plan (2016-26) requires an extra venture of USD 25-30 billion. The Indian Automotive industry will be among the main three of the world in the territory of building, assembling and fare of vehicles and components. The Indian auto part industry is made out of sorted out and sloppy area. The sorted out segment alludes to unique gear producers (OEMs) and is occupied with make of high esteem exactness instruments. While, the disorderly divisions include low-esteemed items obliging secondary selling services. Various sub segments of Auto-segment area: Engine parts, drive transmission and guiding parts, body and skeleton, suspension and braking parts, hardware, electrical parts and others, for example, fan belts, kick the bucket throwing and sheet metal parts. At display, India is viewed as aggressive in assembling of forgings, stampings, castings, machining, wiring bridle and electronic fuel injectors.




100% Foreign Direct Investment (FDI) is permitted under the programmed course in the auto segments segment, subject to all the material controls and laws.




Auto Policy 2002:


Programmed endorsement for 100% remote value interest in auto parts fabricating facilities. Manufacturing and imports in this area are absolved from authorizing and endorsements.


Car Mission Plan 2016-26:


Indian car industry to develop to USD 260 billion-300 billion before the finish of FY 2026.India to be among the main three car ventures on the planet by 2026.Generate 65 million direct and roundabout occupations by 2026.Contribute 12% to India’s GDP by 2026.


National Automotive Testing And R&D Infrastructure Project (NATRiP):


An aggregate of USD 573 million to empower the business to embrace and actualize worldwide execution standards. Focus on giving minimal effort assembling and item advancement arrangements.


Branch of Heavy Industries and Public Enterprises:


USD 200 million store to modernize the auto parts industry by giving a premium appropriation on advances and interest in new plants and equipment. Provided send out advantages to moderate providers of auto segments against the Duty Free Replenishment Certificate (DFRC).


National Electric Mobility Mission Plan 2020 (NEMMP):


It means to bring the transformational outlook change in the car and transportation industry by advancing half breed and electrical versatility in India. It visualizes a vehicle populace of around 6-7 million electric/cross breed vehicle in India by 2020.There has been an aggregate expense of USD 2.15 billion for building such guide. It is a composite plan including request side motivations to encourage obtaining of cross breed/electric vehicles alongside arrangement of supply side impetuses.


Quicker Adoption and Manufacturing of Electric Hybrid Vehicles (FAME) Scheme


The plan expects to reveal various electric transports, electric three-wheelers, and electric shared taxis for multi-modular open transport. It will cover all vehicle portions i.e. two-, three-and four-wheelers, autos, LCVs, transports and so on and all types of half breed (Mild/Strong/Plug-in) and unadulterated electric vehicles. An distribution of USD 67 million made under Phase-1 of FAME India Scheme. The appropriation is given to 11 urban areas to propelling electric transports, cabs and three-wheelers. The urban communities incorporate Delhi, Ahmedabad, Bangalore, Jaipur, Mumbai, Luck now, Hyderabad, Indore and Kolkata, in addition to two urban areas – Jammu and Guwahati under uncommon category.




Research and development Incentives for Industry and Private Sponsored Research:


A weighted expense conclusion is given under area 35 (2AA) of the Income Tax Act. Weighted finding of 200% is allowed to survey for any aggregates paid to a national lab, college or foundation of innovation, or indicated individuals with a particular course and that the said total is utilized for logical research inside a program endorsed by the recommended expert.


Makers with an in-house R&D Center:


Area 35 (2AB) of the Income Tax Act, 1961 gives weighted duty finding of 150% of use brought about by a predefined organization, on logical research in the in-house R&D focuses as endorsed by the recommended expert. This does excludes use on the cost of any land or building. The weighted duty derivations of 150% are compelling till 31st March’2020. Resulting upon that, the weighted duty derivations will be 100%.


State Incentives:


Aside from the specified, each state in India offers extra motivating forces for mechanical undertakings. Motivations are in territories like sponsored arrive cost, unwinding in stamp obligation exception on special and rent of land, control levy motivators, concessional rate of enthusiasm on credits, speculation appropriations, assess impetuses, in reverse regions endowments and unique motivating force bundles for uber ventures. Hardly any cases are:


Andhra Pradesh : Government of Andhra Pradesh is focused on giving area at concessional rates, alongside 24 hours continuous power supply. Capital endowment of half for basic foundation in auto bunches and ASMC engineers, up to a greatest of USD 3.07 million. Financial help restricted to 75% of the cost, subject to a most extreme of USD 38,461 for getting patent enlistment and half of all charges, subject to a greatest of USD 7,692 paid for acquiring quality accreditation. This is relevant to just MSME units. Under Marketing Incentives, half of cost of investment with a greatest measure of USD 7,692 to be repaid to most extreme of 10 MSME units for each year for taking an interest in global exchange fairs. Gujarat : Auto part producers can either profit general motivating forces under the Gujarat Industrial Policy 2015, or under the plan for Mega/Innovative Projects. Jharkhand : Jharkhand presented Automobile and Auto Component Policy 2016 with a plan to make Jharkhand, a favored goal for vehicle and auto-segment fabricating units.The arrangement empowers foundation of Tier-I, Tier-II and Tier-III auto-part makers in the state.Provision of money related help of half for settled capital interests in building and normal framework up to a most extreme of USD 3.07 million.100 % power obligation exclusion might be accommodated 10 years from the date of generation.


Fare Incentives:


Fare appropriation is accessible to exporters as a % of obligation credit scrip under Merchandise Exports from India Scheme (MEIS).Additionally, MEIS Scheme has been stretched out to extra duty lines and extended to 65 nations according to the suggestions by ACMA.