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India Automotive Sector

The automotive sector in India is undergoing significant transformations and disruptions in recent years due to various factors, such as changes in consumer preferences, government regulations, and advancements in technology.  Some key transformations and disruptions in the Indian automotive sector, include:

  • Electric mobility
  • Connected cars
  • Shared mobility
  • Autonomous vehicles, and
  • Disruption of traditional players. 

The internal combustion engine vehicles (ICEV) market continues to dominate the Indian automotive sector. However, the need and demand for clean technology vehicles are transforming the Indian automotive industry. 

In India, there are over 400 million people in need of transport solutions, and meeting these demands through the ICEV will further increase India’s dependence on fuel and Co2 emissions.  To overcome these challenges, in 2013, the GOI launched the National Electric Mobility Mission Plan (NEMMP); the mission is to provide a roadmap for the faster adoption of EVs in the nation and their manufacturing in the country to achieve national fuel security and reduce Co2 emissions.  Though presently, the GOI is more focused on achieving its EV goals, it is also estimated that the future will pave the way for hydrogen-powered vehicles. 

The Indian government has undertaken significant measures to promote the adoption and manufacturing of EVs in the country, including the following:

  • Under the revamped Faster Adoption and Manufacturing of Electric Vehicles II (FAME II) scheme, a production-linked incentive (PLI) scheme for Advanced Chemistry Cell (ACC) suppliers has been introduced, and a separate PLI scheme for auto and automotive components valued at $3.1 billion has been launched for EV manufacturers.
  • To support the increasing number of EVs on the road, the Ministry of Power has emphasized the installation of at least one charging station every 1.86 miles and on highways, on both sides at every 15.53 miles.  The government has allocated $1.2 billion towards charging infrastructure and sanctioned 2,877 electric vehicle charging stations in 68 cities across 25 states/union territories.  Additionally, 1576 charging stations across 9 expressways and 16 highways have been authorized under the FAMEII.
  • India has committed to the global EV30@30campaign, which aims to increase the share of EVs in vehicle sales to 30% by 2030.
  • To support this goal, a Memorandum of Understanding (MoU) signed with Australia in 2022 to source critical minerals.  This MoU includes a $5.8 m investment for a three-year India-Australia Critical Minerals Investment Partnership.
  • Furthermore, the California-India Zero Emission Vehicle (ZEV) Policy program has been established to support the uptake of ZEVs in India, spur the development of the EV industry in India, and contribute to India’s industrial growth.  As part of this collaboration, the University of California and the Davis Institute of Transportation Studies have established a new India ZEV Research Center.   

According to the Ministry of Road Transport and Highways resources, 2-wheeler EV sales rose by 422%, 3-wheelers by 75%, and 4-wheelers by 230% between 2019 and 2021.  The number of electric buses also increased by over 1200% during this period.

Technologies and services in demand:

  • Universally applicable charging infrastructure
  • Motors
  • Controllers
  • Transmission   
  • Batteries and battery management systems
  • Connected vehicle architecture and technologies
  • On-board chargers
  • Thermal systems (cooling)

For entry into the Indian market, U.S. companies must identify quality partners well-connected with OEMs and their Tier1/2 suppliers.  Strategic planning, due diligence, and consistent follow-ups are the prerequisites for doing business successfully in India. 

India’s U.S. Commercial Service team can help with your market entry strategies.  If you wish to pursue market opportunities in this region, please contact the team at the U.S. Commercial Service in India.