'Make in India' - A Boost to the Auto Component Industry

Abstract

The Indian automotive component industry is small in size compared to the world market (INR 740,000 Crores). The industry has been experiencing a high growth rate of 27 % over the period 2001-06 and is expected to grow at a rate of 13 % over the period 2006-15. The quality of components made in India has improved significantly in the last decade and about 11 Indian auto component companies have won the Deming prize so far. India is estimated to have the potential to add up to US$30 Billion by FY 20-21 and to become one of the top five auto component economies by 2025.The industry currently accounts for almost 7% of India’s gross domestic product (GDP) and employs about 19 million people, both directly and indirectly. Phased Manufacturing Programme (PMP) for new projects in New Industrial Policy 1991 and for existing projects in 1994 has been abolished. This followed by Auto Policy 2002 enactment with a Vision: To establish a globally competitive automotive industry in India and to double its contribution to the economy by 2010. The ever-increasing development in infrastructure, big domestic market, increasing purchasing power and stable government framework have made India a favourable destination for investment, as per the vision of Automotive Mission Plan (AMP) 2006–2016.The growth of Indian Auto Component Industry in the little over first decade of the 21st Century is phenomenal. The Industry transformed gradually in stages from serving just Indian market – majority to replacement market - to global OEMs and replacement market(Velury Vijay). Many joint ventures have been set up in India with foreign collaboration. India ranks just behind China with the world’s second largest population at over 120 crore people. (Singh Amarjit et.al). This research paper highlights the growth of Indian Auto Component Industry relating with investment.