Government's Goal: Transforming Indian Auto Industry into Global Leader – Nitin Gadkari
The Indian automobile industry, long considered the apex manufacturing sector in the country, has grown significantly since 2014, with its current size being approximately four times larger than its size in 2014, reaching an approximate value of ₹22 lakh crore. This impressive growth has made the industry a key revenue churner for the government, as it remains the highest revenue generator as a part of Goods and Services Tax (GST) for both the state government and Bharat Sarkar.
The Indian government has set an ambitious goal to make the Indian automobile industry the number one in the world within the next five years. This aim is being pursued through a combination of strategic policies, industry collaboration, and supportive reforms.
One of the key initiatives is the Automotive Mission Plan 2047 (AMP 2047), an industry-led, government-supported strategic roadmap that integrates stakeholders like Original Equipment Manufacturers (OEMs), component manufacturers, policymakers, and academia. This comprehensive plan sets concrete growth, export, and technology milestones for 2030, 2037, and 2047, addressing challenges such as technological advancement and charging infrastructure for electric vehicles (EVs).
The government is also promoting electric mobility aggressively through programs such as the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme and the Production Linked Incentive (PLI) scheme. These policies incentivize the manufacturing and adoption of battery electric vehicles (BEVs), hybrid electric vehicles (HEVs), and related components, aiming to reduce fuel import dependency and emissions.
Another significant measure is the proposed reduction of GST on small cars and two-wheelers from 28% to 18%. This reform is designed to revive demand in key segments, improve vehicle affordability, and boost domestic sales, thereby stimulating industry growth.
The government is also encouraging manufacturers like Tata Motors, Maruti Suzuki, Hyundai, and Mahindra to innovate in hybrids, SUVs, and EVs while expanding global market reach. The goal is to enhance India's export share and manufacturing capability to compete globally.
In addition to these efforts, the government is working on reducing logistics costs, aiming to lower them from 16% to 10% of GDP. This enhancement in logistics efficiency will improve supply chain competitiveness for the automobile sector.
The union minister has emphasized the need for the automobile industry to develop greener and alternative fuels. This focus on cleaner propulsion technology, such as electric powertrain, Compressed Natural Gas (CNG), and hybrid systems, is rising at a fast pace in India.
It's worth noting that China's automobile industry, while currently the second largest, has a size of approximately ₹47 lakh crore, making India's aspirations for global leadership a significant challenge. However, with the coordinated measures, backed by government incentives, policy reforms, and industry collaboration, India is poised to transform into a global automotive leader by boosting production, exports, innovation, and adoption of environmentally sustainable vehicles.
The Indian automobile industry is also a significant employment generator, creating approximately 4.5 crore jobs in the country. Despite the lack of specific details about upcoming cars or bikes in India, the industry's future looks promising, with the potential for continued growth and innovation.
Although India aspires to become the world's leading automobile industry, China currently stands with an approximately ₹47 lakh crore market, posing a significant challenge. Regardless, the panorama of sports and weather plays a crucial role, as the government promotes electric mobility aggressively by lowering GST on small cars and two-wheelers, aiming to stimulate the sector's growth and reduce fuel import dependency.
