India, a rising automotive giant that offers opportunities for the Basque industry

 

El Indian automotive sector It has emerged as a crucial engine for the national economy, contributing 6,5% of the Gross Domestic Product (GDP) and more than 40% of manufacturing GDP. In addition, it generates employment for more than 4,2 million people directly and 25,8 million indirectly, making it one of the largest employers in the country. This boom is supported by growing domestic demand, driven by population growth and improved purchasing power.

 

Basque Trade & Investment, the agency for the internationalization of the Basque company integrated in SPRI Group, has published a comprehensive report that takes a detailed look at this expanding market. The report highlights that India is the fourth-largest producer of light vehicles globally, with a share of 6,4% in 2024, which is projected to reach 7% by 2027. Light vehicle production has seen steady growth, rising from 5,1 million in 2022 to 5,6 million in 2024, and is expected to exceed 6,4 million in 2027.

 

“India is experiencing exponential growth in its automotive industry,” states the Basque Trade & Investment report. “The opportunities for Basque companies are significant, especially in the area of advanced components and technologies«.

 

The report also notes that the Vehicle production is concentrated in three major industrial hubs: West, South and North. In these hubs, the majority of component suppliers are local companies, representing over 80% of the 6.183 locations. However, there are gaps in the local supply for certain advanced technologies and processes, which opens up opportunities for international suppliers specialising in stamping tools and moulds, as well as precision components and advanced processes for complex parts.

 

India wants to position itself as a global production hub

 

 

La electrification is another key growth area. India is moving towards reducing emissions and adopting cleaner propulsion technologies such as CNG, biogas and ethanol. Hybrid and plug-in hybrid vehicles are expected to increase their market share significantly in the coming years.

 

La automotive components industry is also experiencing solid growth, with a year-on-year increase of 10% in 2024. India has achieved a positive trade balance in this sector, with exports outstripping imports by $300 million in 2024.

 

The Indian government is actively promoting foreign investment through initiatives such as «Make in IndiaHowever, the industry faces challenges such as geopolitical tensions, rising logistics costs, and high taxes on automotive components.

 

“Despite the challenges, the growth potential of the Indian market is immense,” the report states. “Companies that can offer innovative and competitive solutions will find an expanding market with high growth potential.”

 

The Indian automotive sector is looking for technological partners that provide innovation and efficiency, prioritising competitive costs. European companies can excel in: optimisation of production processes and industrial layouts, automation and efficiency improvements in factories, innovations in sustainability and reduction of emissions.