Going by the latest report of Invest India, the automotive sector will reach the mark of $300 billion by 2026. It will make India the third-largest automotive market in the world. Auto components export trends reassert the estimated 5x growth in the coming decade.
The report by Invest India, titled “Leveraging the India-U.K. opportunity towards a stronger legacy” talks about the current status of mutual relations and the prospective roadmap for further cooperation. It regards the automotive sector, among others, as a potentially important sector for bilateral collaboration. The other important sectors include financial services, food processing, renewable energy, electronic systems and design manufacturing (ESDM), textiles, chemicals, pharmaceuticals, defence and aerospace.
The following key aspects of the Indian automotive sector are put forward in the report:
Global Ranking: 4th largest vehicle market (2021)
Market Size: USD 222 Billion (FY2020)
Growth Rate: 8.7% (Pre-pandemic)
GDP Contribution: 7.15% (~49% of manufacturing GDP)
Employment Status: 37 Million (Direct + Indirect, 2020)
FDI Allowance: 100% (Automatic route)
The report is optimistic about investment in India. India is witnessing a physical, technological, and social infrastructure building. Such consistency and speed would work as an opportunity for U.K. investors to flourish. “Home to a market of 1.4 billion consumers (the second largest currently) – estimated to be 1.6 billion by 2047 – India will have the largest population by the end of this century, presenting a unique opportunity for business growth and high returns on investments”, says the report.
It also brings out the growth estimations of various sectors, including the petrochemicals market, defence and aerospace market, clean technology, and textiles industry. About clean tech, for instance, it says that by 2040, one-seventh of global funds will be spent in India. With both the countries finalising the Free Trade Agreement (FTA), this report acts as a booster.