India's automobile industry surpasses ₹20 lakh crore milestone in FY24
What's the story
The Indian automotive industry has achieved a significant milestone, surpassing the ₹20 lakh crore mark in FY24. This information was revealed by Vinod Aggarwal, the President of the Society of Indian Automobile Manufacturers (SIAM), at the 64th annual session of the Automotive Component Manufacturers Association of India (ACMA). Aggarwal also highlighted that this sector now contributes around 14-15% to the country's total GST collection.
Economic impact
Significant role in employment and GDP
Aggarwal emphasized the auto industry's substantial contribution to both direct as well as indirect employment generation in India. He also noted that the sector is expected to increase its contribution to the country's GDP beyond the current 6.8%.
Global recognition
Technological transformation and global standing
Aggarwal underscored the importance of technological transformation within the industry, in addition to its growth figures. He proudly announced that India is now the third largest passenger vehicle market, the largest two and three-wheeler market, and third biggest commercial vehicle market globally. "We have become the third largest passenger vehicle market, the largest two and three-wheeler market and third-largest commercial vehicle market as the country marches toward Viksit Bharat by 2047," he noted.
Growth prospects
Import reduction strategy
Aggarwal expressed confidence in the auto industry's potential for accelerated growth and its significant contribution to India's economic development. He revealed that the industry has identified 50 critical components for domestic production, aiming to reduce import dependence. "It was committed to reduce import content by 60% to 20% by 2025 from the base 2019-20 levels, thereby targeting reduced reports to the tune of ₹20,000-₹25,000 crore in five years," Aggarwal said.
Manufacturing initiatives
SIAM and ACMA's efforts toward enhancing indigenous manufacturing
SIAM, in collaboration with the ACMA, has initiated efforts to boost indigenous manufacturing. The first phase of import reduction by 5.8% in two years has been successfully achieved. Aggarwal stated, "We are encouraging ACMA members to commence manufacturing them in India to enable the vehicle OEMs to source these items locally."
Technological progress
Auto industry's technological advancements and future focus
The auto industry has made significant strides in various powertrain technologies such as CNG, electric vehicles, and hybrids. Aggarwal also mentioned the development of hydrogen and fuel cell-based technologies. "Going forward, as the aspirations of the country grow we have to focus more and more aggressively on cleaner and safer vehicles," he said.