Auto industry remains inclined towards China for parts but atmanirbharta echoes
The Indian auto component industry's imports in 2019-20 from China was worth $4,063 million and was once again the largest among all other countries. And while this was a decline of 12% over figures from 2018-19, it was still double than the worth of imports from the next country in the list - South Korea. With the clarion call of 'Atmanirbhar Bharat' (self-sufficient India) form Prime Minister Narendra Modi, however, there is a sense of looking inwards within the industry - a task which may be very difficult but not entirely impossible.
China is the world's largest auto and auto component maker, apart from also being the largest auto market. And by quite a distance. India's imports from the country for automotive component has always been far higher than that from any other country like South Korea, Germany, Japan, United States or even Thailand. And yet, there is a growing understanding that it is about time the industry focuses on reducing imports and begins manufacturing within. "The future of the Indian auto component industry is bright, with GoI focusing on being 'Atmanirbhar' and building global competitiveness," said Deepak Jain, President, Automotive Component Manufacturers Association of India. "Pre-Covid, to create a 'world factory', we had to build scalability, competitiveness and source from across the world. Now, we must de-risk and source internally. We must see a long term road map to develop the Indian market."
ACMA has also made a recommendation to the Indian government on how to possibly ensure a constant supply of components in the automotive sector. "To allow for uninterrupted production in the automotive value chain even during local lockdowns, ACMA has shared a recommendation to GoI to accord the automotive industry with a ‘continuous production industry’ status," said Jain.
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This recommendation may have the potential of ensuring that external factors are unable to hinder manufacturing to any extent as was witnessed at the height of India's national lockdown to check spread of Covid-19. At the time, imports from China suffered delays due to lockdowns in that country as well as more stringent checks here.
Additionally, with simmering geo-political tensions between India and China, it is widely agreed that developing local capabilities - whether in the automotive sector or elsewhere too, will have the twin benefits of meeting local needs as well as putting India on the global map as the new manufacturing hub.
