Making India a world-class automotive manufacturing hub

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The automotive industry is set to grow around four times by FY26, as per the Government’s Automotive Mission Plan (AMP) 2016–26. Make in India has brought the spotlight back on the manufacturing sector.

According to our India Attractiveness Survey 2015, India is the most attractive investment destination, and 62% of respondents suggested entry into manufacturing.

Our strengths

  • Large domestic consumption base
  • Cost-competitive value chain (low design, testing and validation costs, frugal engineering capabilities, cheap labor)
  • Strategic geographical location

The question now is whether we are equipped to emerge as a world-class automotive manufacturing hub.

Need of the hour

  • Enhancing supply chain competitiveness
  • Creating a supportive regulatory environment
  • Developing talent and skills
  • Fast-tracking infrastructure development
  • Incubating R&D and innovation

Initiatives such as Smart Cities, Skill India and Digital India will play a strong role in strengthening India’s manufacturing capabilities. It is now time for the industry and the Government to join hands and adopt a collaborative approach for the sector to realise its potential.

Key themes

Government

Industry

Enabling regulatory environment

  • Provide a stable and consistent policy regime
  • Continued thrust on initiatives such as Make in India, Skill India, etc.
  • Greater clarity on regulations around new mobility service providers.
  • Look to build flexible production capacity
  • Continued focus on investments aimed at reducing vehicle emissions and introducing safety technologies
  • Explore opportunities for a play in the rapidly evolving mobility eco-system

Developing talent and skills

  • Partner with the industry to facilitate vocational training for students and laying out clear standards on competency levels
  • Undertake steps towards simplification and consolidation of labor laws
  • Provide flexibility of operations through reforms related to upscaling/downscaling of workforce numbers
  • Work with academic institutions to develop technical skills in line with the industry requirements
  • OEMs to work with suppliers and dealers in the eco-system on training and skilling agenda
  • Focus on maturity of IR practices internally as well as for partners in the ecosystem

Fast-tracking infrastructure development

  • Continue to encourage private participation to develop specialized infrastructure across ports, railway terminals, etc.
  • Fast track GST implementation to improve logistics efficiency
  • Adopt global best practices for improving transportation and logistics efficiency
  • Outsource logistics function and collaborate with the specialized logistics service providers

Incubating R&D and innovation

  • Continued fiscal incentives on R&D expenditure and extending the scheme to outsourced R&D
  • Bridging the gap between Indian and global automotive standards for safety and emissions
  • Develop a network of industry-academiagovernment to build core R&D skills and training modules
  • Attracting domain experts from mature markets/ other industries to imbibe a strong process culture, improve quality, increase R&D capabilities and facilitate creation of domestic IP

Enhancing supply chain competitiveness

  • Partner with the industry and academia to facilitate supply chain specific skilldevelopment programs
  • Introduce checks and measures along with launching awareness drives to reduce the usage of spurious parts
  • Improve supply chain visibility through use of technology
  • Invest in developing an integrated network and competent supply chain to drive efficiency in operations