New Delhi: A visitor views steering-wheels at a stall at the Auto Expo Component 2018 that began at Pragati Maidan in New Delhi on Thursday.
Credit: PTI Photo
New Delhi: India’s auto component industry is in a sweet spot and is hopeful of maintaining an annual 20-30 per cent export growth to the United States despite President Donald Trump’s tariff threats, Automotive Component Manufacturers Association of India (ACMA) President Shradha Suri Marwah said on Tuesday.
Addressing a media briefing, Marwah said the Indian auto component industry has a competitive advantage in the US market when compared with China, which faces higher tariffs.
“China is at around 20-25 per cent disadvantage over us because of tariffs against them. That puts us in a sweet spot. Our exports (to the US) can continue to grow at a rate of 20-30 per cent,” she said. For components such as fasteners, wheels, rims and gears, India’s landed costs in the US are 25-30 per cent lower than China.
Marwah added that the competitiveness of the Indian auto component in the US market is even at par with Mexico, which shares borders with the world’s largest economy.
“When it comes to the US, Mexico is 2-5 per cent more competitive than us. That’s largely because of the fact that they share borders. So it’s basically on freight, it’s not anything else,” said Marwah, who is also Chairperson and Managing Director of Subros Ltd.
She underlined that auto components is among the few sectors in which India enjoys overall trade surplus. The Indian auto component industry had a trade a surplus of $300 million in 2023-24 against a deficit of $2.5 billion in 2018-19.
As per an industry report released jointly by ACMA and Boston Consulting Group (BCG), auto component exports are likely to jump to $100 billion from $21.2 billion recorded in 2023-24.
When asked about the timeframe for the $100 billion target, Saurabh Chhajer, Managing Director and Partner at BCG, said it could be achieved in 5-6 years.
The report doesn’t give any timeframe. However, it noted that India has the potential to add $40-60 billion to auto component exports by doubling down on classical components with focus on the US and Europe markets.
Capitalising on the emerging EV & electronic value chain through localisation, India can look to tap into additional $15-20 billion exports in components such as battery management systems, telematics units, instrument clusters, ABS, the report noted.
ACMA Director General Vinnie Mehta said the US and Europe are among the key markets for the Indian auto component exports. Out of the total $1.2 trillion global annual auto component trade, China dominates with $149 billion exports, in contrast to India at $21 billion. “This presents a significant headroom for India to expand its footprint and strengthen its position in key export markets,” Mehta said.