Context:

• NITI Aayog has released a report titled "Automotive Industry: Strengthening India’s Participation in Global Value Chains."
• The report provides an in-depth analysis of India’s automotive sector.

Key Highlights:

• The report was launched by NITI Aayog Vice-Chairman in the presence of Dr. V.K. Saraswat (Member, NITI Aayog), Dr. Arvind Virmani (Member, NITI Aayog), and CEO B.V.R. Subrahmanyam.
• It offers a comprehensive overview of the Indian automotive industry, identifying both opportunities and challenges, and outlines a roadmap to position India as a key player in the global automotive markets.

Global and Indian Automotive Landscape:

• Global automobile production in 2023 reached approximately 94 million units.
• The global automotive component market was valued at around USD 2 trillion.
• Export contribution stood at nearly USD 700 billion.
• Electric Vehicles (EVs) and Smart Mobility emerged as key trends in the sector.

Indian Scenario:

• India became the 4th largest automobile producer globally after China, USA, and Japan.
• Annual production: ~6 million vehicles.
• Strong domestic demand and cost-effective labor are positioning India as a manufacturing and export hub.

Achievements:

• Significant progress in small cars and utility vehicle segments.
• Government initiatives like "Make in India" have boosted investment and innovation.
• Emerging Trends in the Automotive Sector:

Electric Vehicle (EV) Revolution:

Driven by:

• Growing consumer demand for sustainable mobility
• Regulatory push to reduce carbon emissions
• Innovation in battery technology and cost reduction

Shift in Global Supply Chains:

• Battery manufacturing hubs emerging in Europe and USA.
• Increased demand for minerals like lithium and cobalt boosting mining investments.
• Traditional supply chains are evolving, creating new opportunities for collaboration and competition.

Industry 4.0 and Digitization:

• Use of AI, ML, IoT, and robotics is transforming manufacturing.
• Enhances efficiency, reduces cost, and adds flexibility.
• Giving rise to smart factories and connected vehicle-based business models.
• Proposed Interventions for Growth: NITI Aayog recommends a set of strategic fiscal and non-fiscal interventions to enhance India’s global competitiveness:

Fiscal Interventions:

• OPEX Support: Focus on tooling, dies, and infrastructure to scale up manufacturing capacity.
• Skill Development: Create a talent pipeline for sustainable industry growth.
• R&D, IP Facilitation & Branding: Encourage research, IP transfers, and international branding for empowering MSMEs and product differentiation.
• Cluster Development: Promote collaboration among firms through shared infrastructure like R&D and testing centers.

Non-Fiscal Interventions:

• Adoption of Industry 4.0: Promote integration of digital tech and advanced manufacturing standards to improve efficiency.
• International Collaboration: Encourage joint ventures (JVs), foreign cooperation, and Free Trade Agreements (FTAs) to expand global market access.
• Ease of Doing Business: Simplify regulations, allow flexibility in working hours, improve supplier development and business environment for motor vehicle companies.

Vision 2030 – Targets by NITI Aayog:

NITI Aayog – Key Information (Summary Table)