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India is emerging as an important China+1 sourcing base for global OEMs, particularly for castings, forgings, machined parts and other labour-intensive components. European and U.S. OEMs are increasingly shifting sourcing toward India, while Japanese OEMs continue to rely more on established Southeast Asian supply chains. India’s cost advantage and established manufacturing clusters are supporting this shift, with the auto-component industry estimated at around $80 billion and exports growing at roughly 8–9% CAGR.
EVs offer another growth opportunity, especially in drive motors, battery cooling systems and filtration. However, India remains heavily dependent on imports for batteries, electronics, displays, semiconductors and other high-value components. The expert expects the EV component industry to reach around $20 billion over the next four to five years, while greater localisation of high-tech components could eventually reduce import dependence and improve competitiveness.
Supplier economics vary significantly by component complexity, with EBITDA margins ranging from around 8–10% for castings and forgings to up to 15% for high-tech electronics and sub-assemblies. Global suppliers such as Motherson, Bharat Forge, Suprajit, Sona Comstar and Craftsman are positioned across different growth areas, while overseas manufacturing generally requires five to six years of committed OEM volumes and a three-year payback. By 2030, India could reach around 7–8% of global auto-component sourcing, but supply-chain stability, cost competitiveness, import dependence and geopolitical risks will remain key factors shaping sourcing decisions.
