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Introduced in 2014, the ‘Make in India’ initiative has brought transformative changes to India’s automobile industry. Through policy reforms, fiscal incentives, and infrastructure development, the country has evolved into a rising global automotive center. From domestic car production to the manufacturing of electric vehicles (EVs), India has made remarkable strides across the board.
India’s journey in the automobile sector began with the liberalization of 1991, when the industry was de-licensed, and 100% Foreign Direct Investment (FDI) was allowed via the automatic route. Vehicle production grew from 2 million units in 1991–92 to 28 million units in 2023–24. Today, almost all major global automotive players have set up manufacturing bases in India.
The Indian auto industry is now valued at $240 billion (₹20 lakh crore), contributing around 6% to the country’s GDP. According to the Ministry of Heavy Industries' 2024–25 report, the sector has generated nearly 30 million jobs, with 4.2 million direct and 26.5 million indirect employments.
Auto Component Sector: Backbone of Aatmanirbhar Bharat
The auto component industry plays a pivotal role in strengthening the automotive ecosystem. It produces a wide range of parts such as engine systems, transmission, braking systems, electronics, and body/chassis parts. India’s competitive cost, skilled workforce, and policy support have made it a preferred global supplier.
In FY 2024, the sector clocked a turnover of ₹6.14 lakh crore ($74.1 billion), with 54% from domestic OEM supply and 18% from exports. Over 25% of its annual output is exported to regions like Europe, the US, and Asia. The sector aims to reach $100 billion in exports by 2030.
The EV Revolution and Government Initiatives
India’s EV sector is witnessing exponential growth. By August 2024, over 4.4 million EVs were registered, with 950,000 units added in the first eight months of 2024 alone. The government has launched several schemes to support this transition:
FAME India (Phase II) – ₹11,500 crore allocated to support electric 2Ws, 3Ws, buses, and public charging infrastructure.
PLI-Auto Scheme – ₹25,938 crore to boost production of Advanced Automotive Technologies (AAT).
ACC Battery Scheme – ₹18,100 crore for creating 50 GWh of battery manufacturing capacity.
PM E-Drive – ₹10,900 crore to support a wide range of EV categories, including trucks, ambulances, and charging infrastructure.
PM E-Bus PSM – ₹3,435 crore to support over 38,000 electric buses.
SMEC Scheme – Minimum investment of ₹4,150 crore required to promote EV car manufacturing with phased localization targets.
Policy Support and Foreign Investments
In the last four years, India has attracted $36 billion in FDI in the automotive space. Leading players like Hyundai, Mercedes-Benz, and Toyota have announced major investment plans. Additional support measures include:
1.GST reduced from 12% to 5% on EVs
2.Guidelines for interoperable EV charging infrastructure (issued in September 2024)
3.Green license plates and permit exemptions for EVs
4.Amendments in Model Building By-Laws to mandate charging stations in new buildings
Conclusion
The Make in India initiative has propelled the Indian automotive and auto component sectors toward self-reliance and global competitiveness. With a rapid rise in EV adoption, strong focus on innovation, and expanding exports, India is not just poised to become a global manufacturing hub, but also a leader in sustainable mobility in the years to come.
