The Indian automotive sector, a cornerstone of the nation’s economy, faces challenges due to global disruptions. The Ministry of Commerce and Industry’s Special Secretary, Rajesh Agrawal, has highlighted the vulnerabilities exposed by restrictions on rare earth exports imposed by China. Agrawal sees this as a pivotal moment for the sector.
At the 65th SIAM (Society of Indian Automobile Manufacturers) conference, Agrawal described the situation concerning permanent magnets as a ‘wake-up call,’ emphasizing the imperative for self-reliance within the industry. He noted that the auto sector needs to manufacture the required parts domestically.
Recent periods have seen robust demand from Africa, Latin America, Australia, the Gulf nations, and New Zealand. Yet, supply chain disruptions stemming from events such as the Red Sea crisis and US tariff policies have created obstacles. Agrawal clarified that the government is eager to find solutions, while underscoring the importance of the auto sector’s active engagement in the global supply chain.
India’s automotive sector struggles with a cost disadvantage relative to its global counterparts, ranging from 15 to 19 percent. Agrawal emphasized the critical need for higher investment in research and development to overcome this gap. He stressed that technological leadership and innovation within the auto sector will be key drivers of India’s future growth, supporting the nation’s ambition of becoming a developed nation by 2047.
Sudhakar Dalela, Secretary (ER) of the Ministry of External Affairs, indicated that while India’s domestic market is strong, expansion of the global footprint is also crucial. He highlighted the need for the Indian automobile industry to solidify its presence, particularly in Africa, Latin America, and developed countries.