India’s auto parts makers face a new race: Localise, innovate, lead

New Delhi: Auto component makers must move fast to own more of the value chain by deepening localisation to have a bigger role in global supply chains amid geopolitical uncertainties, tariff shocks and critical-mineral crunches, the heads of the country’s top carmakers and senior ministers said at the annual convention of the Automotive Component Manufacturers Association (ACMA) on Wednesday.

Addressing delegates, Maruti Suzuki MD & CEO Hisashi Takeuchi said deep localisation is an insurance against a volatile world.

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“Deep localisation is about reducing our exposure to external disruptions by strengthening domestic capabilities and progressively owning a larger share of the value chain,” he said, adding that scale alone is not enough and that quality across Tier-2 and Tier-3 suppliers must become the industry’s “signature.”

Hyundai India MD & CEO Tarun Garg said that, given geopolitical risks, India can no longer afford to rely on imports and must instead accelerate the building of technological capabilities in semiconductors, electric vehicle battery cells, rare-earth magnets and power electronics.

With the component trade deficit at $1.4 billion in FY26, he argued that ownership, not just output, is the goal. “Technology ownership is essential for strategic independence,” Garg said, urging every industry leader to localise one component, file one patent and enter one new market.

Society of Indian Automobile Manufacturers (SIAM) President Shailesh Chandra, who is also MD of Tata Motors Passenger Vehicles, said the post-pandemic resilience demonstrated by the industry must now evolve, with stakeholders across the board scaling up the design, development, manufacturing and export of components from India. Citing recent rare-earth supply shocks, he said the response cannot stop at one mineral.

“We need a comprehensive approach covering raw materials, processing, components, sub-components and final systems,” Chandra said.

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ACMA President Vikrampati Singhania agreed that the value chain must go beyond simply making parts in India. “The next phase must increasingly be about creating in India, engineering in India and innovating in India, for India and for the world,” he said. Singhania added that MSMEs and smaller suppliers must be brought along, not left behind in this endeavour.

Backing the industry’s call, Union Heavy Industries Minister HD Kumaraswamy said policy measures have already been undertaken through PLI (Production Linked Incentive) schemes, rare-earth magnet manufacturing programmes and electric vehicle incentives to support growth in the industry, both in terms of volumes and technological know-how. “India should not merely participate in the global mobility transition; India should help lead it,” he said.