Future Prospects of Automobile Industry in India

The automotive industry in India is rapidly growing and is set to become the world’s third-largest by 2026, generating $118 billion in revenues. Despite a global auto crisis, the Indian automobile industry has proven its resilience. In addition to offering product-linked incentives, such as the scrappage policy, it is also embracing new technologies at a rapid rate. Listed below are some strategies to support the Indian auto industry.


Changing mobility landscape: The auto industry in India is facing a series of challenges that will make it difficult to compete in a global market. The current slowdown in global demand is having a negative impact on manufacturing, a trend that is set to worsen in the coming years. The automotive industry needs to become more efficient and productive in order to remain competitive. Fortunately, the Indian automotive industry has three key enablers that will help the sector survive and thrive.

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Export-linked incentives

Auto exports are a big opportunity for India. In addition to increasing exports, the Indian automotive industry will need to expand its distribution network and provide excellent after-sales service. The country’s export market is vast and offers huge growth opportunities. In the past five years, auto exports have increased by 22%, and are likely to continue to rise in the coming years. However, currency fluctuations will cause a significant amount of volatility in export earnings. While depreciation of the rupee reduces foreign earnings, strengthening the rupee will increase earnings.

Reducing costs

The government is taking steps to support the automotive industry, including introducing new technologies, and reducing costs. Several other factors are supporting the industry as well. Low-cost skilled labor and steel production are just a few of the advantages the sector enjoys. As a result, it provides great opportunities for investment and creates a good number of jobs for both skilled and unskilled labor. The Indian automobile industry is expected to see a 2.2 per cent increase in sales in the next five years.


As the per-capita GDP of India climbs, the automotive sector is also growing. The auto industry in India is expected to grow by more than 7% in the next decade. The current state of the auto industry is a positive indicator of the economy. The automotive sector has shown significant growth in the last decade. There are many reasons for this. Despite the current global recession, India’s economy is poised for a healthy recovery.


As global automakers seek to source parts outside of China, India is an attractive option for suppliers. The country’s high-quality manufacturing facilities, competitive costs, and focus on innovation are a big advantage. The recent tailwinds of the automobile industry in India have provided a boost to many companies. As a result, a leading forging company is currently exporting 60 percent of its products and 20 to 40 percent of its total revenues.

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