India’s Auto Industry Calls for Strategic Pivot Toward High-Value Tech Localisation
New Delhi: As India cements its position as a global automotive hub, the industry is grappling with a looming strategic challenge: a deepening reliance on imported, high-value technologies. Leadership from the nation’s top two automakers, Hyundai Motor India and Maruti Suzuki, have issued a collective warning that if India is to secure its future, it must move beyond traditional manufacturing and aggressively localise the “brain” of modern vehicles.
Speaking at the annual session of the Automotive Component Manufacturers Association (ACMA), Hyundai Motor India MD & CEO Tarun Garg highlighted a worrying trend in the sector’s trade balance. While India exported approximately $24 billion worth of auto components in the 2025-26 fiscal year, it imported $25.4 billion worth of goods, resulting in a trade deficit of $1.4 billion.
The Value-Chain Mismatch
Garg noted that the deficit is not merely a quantitative problem but a qualitative one. “Our exports remain concentrated in relatively mature technologies, while our imports are led by advanced, higher-value technologies, which may well define the future,” he explained.
To bridge this gap, Garg argued that India must achieve “technological ownership.” This includes building domestic infrastructure for semiconductor chips, power electronics, rare-earth magnets, and battery cells. According to industry leaders, moving up the value chain—from simple assembly to core engineering and IP development—is essential for the nation’s long-term strategic independence.
Insulating Against Global Disruptions
Maruti Suzuki India MD & CEO Hisashi Takeuchi echoed these sentiments, framing the transition as a necessary shield against the volatile nature of global supply chains. “Deep localisation is about reducing our exposure to external disruptions by strengthening domestic capabilities and progressively owning a larger share of the value chain,” Takeuchi stated.
He further noted that the timing for such a shift is ideal. With India’s domestic demand surging and government support incentivizing manufacturing, there is now a strong economic justification for producing complex components locally—technologies that were previously dismissed as too expensive or difficult to manufacture competitively on Indian soil.
Strengthening the Wider Ecosystem
A recurring theme throughout the ACMA session was the need for an inclusive technological upgrade that reaches every tier of the manufacturing supply chain.
Both CEOs emphasized that relying solely on Original Equipment Manufacturers (OEMs) and Tier-1 suppliers will not suffice. Takeuchi pointed out that the industry’s resilience depends on building high-level engineering and quality-assurance capabilities among Tier-2 and Tier-3 suppliers. Meanwhile, Garg advocated for a broader digital transformation, urging the industry to integrate AI, data-driven manufacturing, and shared learning platforms across the entire supplier network.
As the global automotive industry undergoes a seismic shift toward electrification and autonomous systems, experts believe that high-value tech imports will remain a central debate. For India to remain competitive, the focus must now shift from the quantity of vehicles produced to the depth of the technology indigenized within them.
