Policy targets $145 billion auto components industry by 2030, aiming to strengthen domestic manufacturing and triple exports to $60 billion.
The government is working on an incentive scheme of over ₹50 billion for the automobile component industry, aimed at scaling up domestic manufacturing and sharply increasing India’s share in the global automotive value chain. Officials said the proposed policy seeks to grow the sector to $145 billion by 2030 and triple exports to $60 billion.
Being formulated by the ministry of heavy industries, the programme is expected to focus on export oriented, high value components where India remains heavily import dependent. The objective is to raise India’s share in the global auto components market from the current 3% to around 8% over the medium term. The draft framework includes two key pillars: operational expenditure support for engines, engine components and transmission systems, and capital expenditure support for tools and dyes.
Officials said the incentives are designed to offset cost disadvantages faced by domestic manufacturers while improving supply chain resilience amid rising global trade restrictions and localisation policies. Despite being the world’s fourth largest automobile producer, India accounts for only about $20 billion of global automotive component trade.
Engines, transmission systems and tools and dyes have been prioritised due to their dominance in global trade and India’s relatively weak domestic capabilities. Together, engines and transmission related components account for nearly 60% of global auto component trade, while 30 to 40% of domestic demand for tools and dyes is still met through imports.
India’s auto component industry was valued at about $80.2 billion in 2025, compared with a global market exceeding $2.1 trillion. The government expects the proposed scheme to play a central role in boosting exports, reducing import dependence and improving competitiveness, while complementing existing incentives focused largely on electric vehicle components.
