The Indian auto component industry is on the cusp of a major transformation. According to a McKinsey & Company report, the sector is set to triple in size, reaching $200 billion by 2030, positioning India as a critical hub in the global automotive supply chain. With rising domestic demand, rapid adoption of electric vehicles (EVs), and a growing export footprint, India’s component makers are poised for global leadership.

Market Growth and Sales Outlook

India’s domestic auto component sales are expected to grow 7–8% annually until FY30, driven by rising vehicle ownership, higher component intensity per vehicle, and increasing adoption of advanced technologies.

Key Growth Projections for India’s Auto Component Industry

Indicator	Projection / Trend	Driver
Market Size	$200 billion by 2030 (3x growth)	Demand, exports, EV adoption
Annual Sales Growth	7–8% until FY30	Rising vehicle demand, higher parts usage
Export Potential	$70–100 billion by FY30	ICE + EV component demand
ICE Component Opportunity	$20–30 billion by FY30	Sustained ICE demand in emerging markets
EV Sales Growth	35% CAGR domestically	Rapid EV adoption, policy push
Global Hub Potential	India seen as a future leader	Supply chain diversification

Export Potential: ICE and EV Opportunities

Exports are projected to reach $70–100 billion by FY30, with opportunities split between traditional internal combustion engine (ICE) components ($20–30 billion) and the fast-growing EV segment.

India’s domestic EV market is expanding at an impressive 35% CAGR, with two-wheelers and SUVs leading the transition. Suzuki’s decision to select India as the global hub for its first electric SUV, the e-Vitara, underscores global confidence in India’s capabilities.

Supply Chain Diversification and Industry Resilience

The pandemic and geopolitical shifts have accelerated supply chain diversification, with automakers seeking low-risk production bases. India’s suppliers are expanding capacity, while global OEMs diversify sourcing away from China. This positions India as a reliable and resilient manufacturing hub, similar to global leaders like the U.S., Europe, and Japan.

Domestic Market Momentum

• Two-wheeler market: Back to pre-pandemic levels, led by EV scooters.
• Four-wheeler momentum: Global OEMs like Suzuki investing heavily in India for EV production.
• Leadership sentiment: Indian business leaders believe the country can lead, not just participate, in the global auto supply chain.

India vs. Global Auto Component Industry Trends

Aspect	India	Global
Market Size & Growth	Projected to triple to $200B by 2030	Steady growth, EVs driving expansion
Annual Sales Growth	7–8% until FY30	Varies by region; EV strong, ICE under pressure
Export Potential	$70–100B by FY30 (ICE + EV)	Supply chains shifting, EV exports gaining
Technology Adoption	Rapid, esp. in EV & digital components	Heavy global investment in EV + automation
Supply Chain Diversification	Driven by pandemic & geopolitics	Global trend, esp. away from China
EV Growth	Domestic EV sales CAGR of 35%	Exponential global growth in EVs
Industry Resilience	Positioning as global hub	Global focus on resilient, flexible supply chains
Domestic Market	Two-wheeler recovery, EV-led	Recovery varies by region and vehicle type

Conclusion

The McKinsey report highlights a once-in-a-generation opportunity for India’s auto component industry. With $200 billion market potential, rising exports ($70–100 billion), and domestic EV adoption at 35% CAGR, India is aligning with global automotive shifts while carving its own leadership path. Supported by supply chain diversification and robust domestic momentum, the industry is not just preparing to grow—it is preparing to lead.