Indian Automotive Industry one of the largest in the world contributes around 7% to Indian GDP and enjoys 100% FDI through automatic approval route. The industry is also set to become an production hub for other countries. Its exports have been growing up - with significant contributions from Hyundai, Maruti, Ford and Nissan. Now General Motors is also planning to invest exclusively for export market. The industry is also evolving to move from IC engines to electric and hybrid vehicles, stricter anti-pollution norms and tougher measures on parking space. However, it is set and growing at 10% to 12% over the past years.
Indian automotive industry is present as clusters in North - Gurgaon, Tapukara in Rajasthan, Uttaranchal, Pithampur belt in Madhya Pradesh, Pune in Maharashtra, Chennai-Hosur-Bidadi belt in Tamil Nadu and upcoming cluster in Sanand in Gujarat and Krishnapatnam in Andhra Pradesh. It has the potential to generate up to US$ 300 billion in annual revenue by 2026.
The industry is facing challenge in terms of coming BS-VI emission standard which by-passes BS-V standard to counter rapidly deterioting air standard in cities. This demands higher investments in R&D and improvement of facilities. The government is also indicating several policy decision measures to move to electric vehicles by 2030 which will be a tectonic shift in terms of auto components and charging infrastructure