19-JUN-2025,01 :00PM A recent comprehensive industry report has highlighted critical execution gaps that must be addressed if the Indian Auto sector is to maintain its growth trajectory and global competitiveness in the coming decade. Despite significant progress in electric vehicles, domestic manufacturing, and exports, analysts warn that without key structural reforms and strategic focus, the sector risks losing momentum.
The Indian Auto industry is currently the fifth-largest in the world, contributing over 7% to the national GDP and employing more than 35 million people. But as global mobility trends shift towards clean energy, digital integration, and sustainable practices, India’s auto ecosystem must undergo transformation to stay relevant.
Indian Auto Industry at a Crossroads
Execution Gaps Threaten Growth Despite Potential
The report—commissioned by a leading policy think tank in collaboration with industry stakeholders—stated that the Indian Auto sector suffers from an “execution deficit” in areas like innovation, policy implementation, supply chain modernization, and EV infrastructure rollout.
While government policies such as the Production Linked Incentive (PLI) schemes and FAME-II (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) have generated momentum, actual on-ground implementation has been slower than anticipated.
Industry expert Rajeev Kapoor noted, “The potential is massive, but unless the execution bottlenecks are addressed—ranging from state-level clearances to lack of skilled labor—we might miss the bus during this critical transition period.”
Key Challenges Facing the Indian Auto Ecosystem
1. Supply Chain and Semiconductor Dependency
One of the most pressing challenges is the Indian Auto industry’s dependence on global supply chains, especially for semiconductors, batteries, and other EV components. The global chip shortage during the COVID-19 pandemic exposed the sector’s vulnerability.
Manufacturers are now advocating for a localized supply chain ecosystem. While some initiatives to boost domestic semiconductor manufacturing have been announced, they remain in early stages and require swift execution.
2. Inadequate EV Infrastructure
Though India’s electric vehicle ambitions are on track with increasing sales in two-wheeler and three-wheeler segments, public charging infrastructure still lags behind. The report emphasized that unless a robust and accessible EV charging network is rolled out in both urban and rural areas, consumer confidence and adoption rates will remain limited.
This gap is especially evident in tier-2 and tier-3 cities, where the next wave of EV growth is expected to come from.
3. Fragmented Policy Landscape
The Indian Auto sector is regulated by both central and state governments, leading to inconsistencies in taxation, incentives, and standards. Experts believe that a unified national auto policy with clearly defined roles and timelines can help reduce confusion and accelerate implementation.
Indian Auto Sector Needs a Unified Vision
Public-Private Collaboration Critical for the Next Phase
The report urges greater collaboration between government agencies, private manufacturers, tech startups, and academic institutions. Innovation must be incentivized through grants and incubation support for homegrown solutions in battery technology, autonomous mobility, and connected vehicles.
Startups working on battery-swapping technology and alternative fuels like hydrogen also need access to streamlined licensing and funding support to scale their operations quickly.
Moreover, partnerships with global players for technology transfer and R&D could fast-track India’s position in the global auto market.
Skilling the Workforce for the Future of Indian Auto
Massive Reskilling Required to Meet Evolving Demands
One of the understated but crucial areas in the report is the need for reskilling India’s vast automotive workforce. With automation, AI-driven diagnostics, and EV components becoming standard, millions of workers must be retrained to adapt to new tools and technologies.
The government’s Skill India mission has laid some groundwork, but industry leaders argue for more targeted programs focused on the Indian Auto ecosystem. Vocational training centers, online certification, and OEM-led workshops can help bridge the skill gap effectively.
The Role of Indian Auto in Achieving Climate Goals
Sustainable Mobility as a National Priority
India has pledged to achieve net-zero emissions by 2070, and the Indian Auto sector will play a pivotal role in this journey. According to the report, over 80% of India’s vehicular emissions come from urban transportation. Transitioning to electric and hybrid models, alongside public transport electrification, can drastically cut urban pollution levels.
However, this requires strong incentives for both manufacturers and consumers. Reduction in GST for EVs, scrappage policies for old vehicles, and financial support for electric buses in public fleets are seen as immediate steps to be prioritized.
Indian Auto Exports and Global Competitiveness
From Assembly Line to Global Brand Recognition
The report also highlights an opportunity for India to become a global export hub, particularly in two-wheelers, compact cars, and EV components. Countries in Africa, Southeast Asia, and Latin America are emerging as lucrative markets.
To tap into this, the Indian Auto sector must improve its manufacturing standards, reduce logistic costs, and fast-track free trade agreements. Branding efforts to promote Indian vehicles as affordable yet reliable alternatives could open new international revenue streams.
Recommendations to Close the Execution Gap
To ensure the Indian Auto industry thrives in the next decade, the report suggests several actionable recommendations:
Streamlined Regulatory Framework: Establish a single-window clearance system for EV and auto manufacturing units.
EV Infrastructure Expansion: Encourage public-private partnerships to expand the EV charging network.
Skill Development Initiatives: Launch industry-specific skilling programs tied to real-time industry requirements.
Incentives for R&D: Provide tax benefits and direct funding to startups and OEMs working on sustainable innovations.
Localize Supply Chains: Promote Make in India initiatives specifically for semiconductor and battery manufacturing.
Export Promotion: Provide support for Indian companies to participate in international auto expos and trade fairs.
Conclusion: A Decade of Opportunity for Indian Auto
The Indian Auto industry stands at a critical inflection point. With the right execution, it can become a global leader in sustainable and affordable mobility. But to seize this opportunity, bold reforms, fast-tracked implementations, and cohesive policy frameworks are essential.
As the world evolves rapidly toward electric, connected, and intelligent transportation systems, India’s auto sector must match pace not only with its ambitions but also with its ability to execute. The next decade offers a golden opportunity—provided it is met with resolve and readiness.
Source : ANI
