Indian automotive sector is set to reach its ambitious goal of reducing import value by up to ₹25,000 crore (approximately $3 billion) over the five years leading to the end of this fiscal year, by enhancing the localisation of advanced components like electric motors, airbags, and automatic transmissions.

According to the strategy, multiple projects were launched to reduce parts imports and enhance localisation by up to 20% from FY20 standards across 11 essential categories such as drive transmissions, engines, steering, and electronic and electrical components. These elements make up approximately 70% of overall imports.

Automakers and component producers accomplished net localisation, defined as localisation gains minus additional imports from volume increases, amounting to ₹7,018 crore over two years ending in FY22, according to an evaluation of localisation initiatives carried out by industry groups SIAM (Society of Indian Automobile Manufacturers) and ACMA (Automotive Component Manufacturers Association). The sector is striving to achieve net localisation of an extra ₹17,977 crore over the three years leading to FY25.

A reassessment of the localisation targets achieved by the domestic automotive industry will be undertaken after March-end, following which fresh targets will be set in consultations between the industry and government to further strengthen local manufacturing of automobiles and auto parts, the executives said. "Value-addition from the Indian auto components industry has gone up significantly in the last couple of years. In the first phase (till FY22), we achieved double the target of attaining localisation level at about 6%," said Shradha Suri Marwah, president, Acma. "The second phase is underway. The industry is targeting deepening localisation by another 15%".