The domestic automotive industry has called for a shift in its localisation strategy from manufacturing technologies developed overseas to designing, developing and owning the technologies that will power the next generation of vehicles, as the country seeks to emerge as a global automotive manufacturing and technology hub.
Industry leaders at the 66th annual session of the Automotive Component Manufacturers Association of India (ACMA) said India has built significant manufacturing scale and a deep supplier ecosystem, but the next phase of growth will depend on greater investments in research and development, engineering, intellectual property and critical technologies.
“We should not aspire merely to manufacture globally developed technologies in India. We should increasingly aspire to develop technologies in India for the world,” SIAM President Shailesh Chandra said.
Chandra, who is also managing director of Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, said the changing architecture of automobiles is increasing the importance of semiconductors, power electronics, batteries, electric motors, sensors, software and connected systems. India needs to capture a larger share of the value created by these technologies, he said.
“We should follow a simple principle: design in India, develop in India, manufacture in India and export from India,” Chandra said.
The call marks a shift in the industry’s localisation narrative. While import substitution and increasing domestic content have been central to India’s automotive manufacturing strategy, industry leaders now want localisation to move higher up the value chain, towards technology ownership and product development.
ACMA President Vikrampati Singhania said the next phase of the Make in India programme should increasingly focus on creating technology and intellectual property domestically.
“For years, we have spoken about Make in India. The next phase must increasingly be about create in India, engineer in India and innovate in India, for India and for the world,” Singhania said.
The opportunity is significant. India’s auto-component industry recorded turnover of around ₹7.6 lakh crore, or about $86 billion, in FY26, while exports reached approximately $24 billion.
However, Hyundai Motor India Managing Director and CEO Tarun Garg pointed to a technology gap in the trade numbers. India imported auto components worth around $25.4 billion in FY26, resulting in a trade deficit of about $1.4 billion. More importantly, he said, exports remain concentrated in relatively mature technologies, while imports are increasingly skewed towards advanced and higher-value technologies.
“Technology ownership is essential for strategic independence,” Garg said, calling for greater domestic capabilities in semiconductors, rare-earth magnets, power electronics and battery cells.
The push comes as the global automotive industry undergoes a fundamental technology transition towards electrification, software-defined vehicles, advanced electronics and connected systems. Recent disruptions in critical mineral and rare-earth supply chains have also highlighted the strategic risks associated with dependence on overseas suppliers.
Chandra said localisation therefore needs to cover the entire technology chain, from raw materials and processing to components, sub-components and final systems.
But building technology ownership will require capabilities beyond large automakers and Tier-1 suppliers. Maruti Suzuki India Managing Director and CEO Hisashi Takeuchi said deeper localisation must extend to Tier-2 and Tier-3 suppliers, with greater focus on quality, engineering and productivity across the ecosystem.
“Unless our Tier-2 and Tier-3 suppliers are capable, we can’t produce world-class quality,” Takeuchi said.
The next phase will also require India to make increasingly complex, technology-intensive and scale-dependent products economically viable domestically, according to the BCG-ACMA report ‘Beyond Resilience: Built to Endure. Designed to Win’.
The report said the auto-component industry is aiming to more than double in size by FY30, targeting turnover of about $200 billion from around $86 billion in FY26. Exports are targeted at about $45 billion, up from about $24 billion currently.
The industry’s ambition, therefore, is moving beyond straightforward import substitution towards building globally competitive technology and manufacturing capabilities in India.
