Auto Components Sector in India

Projected to become the 3rd largest in its domain globally by 2026, India’s auto-components sector is witnessing massive growth with interest from businesses from around the world.

As the spending potential of Indian consumers continues to rise, the demand for better technologies and more options in the automotive market has consequently boosted the growth of its supporting auto-components sector. To encourage extensive local production and the creation of international trade opportunities, the Government of India has implemented several policies that benefit the auto-component sector.

The Opportunity

With many leading global automobile manufacturers and transportation companies entering Indian markets, there is an increasing demand for world-class components and automotive parts to support the larger ecosystem. Fueling this growth, new initiatives have been mandated by the Government for the sector’s long-term growth as well as the promotion of manufacturing components in India.

The significant potential of the auto-component sector in India can be captured in 3 key figures as:

$0.2 billion
Net-value as of FY 2017-18
Foreign Direct Investment permitted
0 - 25%
Lower manufacturing costs than Europe and Latin America

Leveraging our work and experience in this sector, which ranges from advisory and research to long-term financial structuring, our team with sectoral expertise on auto-components have compiled the following documents.

auto components Sector in india

Auto-components Sector Profile

The auto-components manufacturing scenario in India has grown exponentially over the years owed to a strong push on domestic manufacturing and the agenda of making India a force in the global market, for both domestic production as well as export. However, there exist certain practical challenges from tax and financial point of view for companies entering the Indian market in the auto components manufacturing arena, something which we’ve highlighted in our paper along with a holistic overview of opportunities and market potential of the sector.

Overview Of Indian Auto-Components Sector in 2020

Overview Of The Indian Auto-Components Sector

Given the enormous market for the auto sector in India, it was only logical to have a robust domestic auto-components manufacturing market as well. Owed to the various policies of the Government which have promoted manufacturing (such as the Make In India initiative), including both domestic and foreign companies setting up their capacities in India, this profile can serve as the first checkpoint for businesses to get a detailed overview of the current market, its historical growth and how it looks to progress going forward. Via this, we’ve also taken the liberty to highlight how a new tax regime has been a welcome move for new market entrants in the sector.

Indian Auto-Components Sector - Opportunities in 2020

Business Opportunities In The Indian Auto-Components Sector

Since the auto components manufacturing sector evidently holds enormous potential for growth and business opportunities, it is imperative to understand how new market entrants can look to enter the sector. It is important to identify the right opportunity, the right market entry point, and the right domestic partner (provided it’s a collaborative effort such as a joint venture) to enter the market and the most of it, something which has been carefully analyzed in our paper. A starting guide to understand the nuances of the sector, our research effort should help in attaining a holistic market view for auto components manufacturing in India.



Stay updated with our insights and expert opinions on significant aspects of doing business in this sector as well as key policies issued by the governing authorities that impact the same:

Analyzing The Impact Of GST On The Automobile Sector In India

Analyzing The Impact Of GST On The Automobile Sector In India

Auto Sector Slowdown Instead Of Blaming Millennials

What Nirmala Sitharaman Should’ve Said About The Auto Sector Slowdown Instead Of Blaming Millennials


How To Setup A Successful Auto-Component Joint Venture With An Indian Company