Union Minister Nitin Gadkari rallies carmakers to hike auto localisation and quality standards. This move promises cost cuts and a global edge
Nitin Gadkari, Union Minister for Road Transport and Highways, delivered a sharp message on December 17, 2025. He called on carmakers to ramp up auto localisation and sharpen manufacturing quality. Imports drain resources, he noted. Local sourcing builds strength instead. This push aligns with India’s Make in India drive. Carmakers already nod to the logic. Indian parts shine with competitive prices and global standards. Thus, global firms source more from here.
Gadkari highlighted export trends. Two-wheeler makers export 50 per cent of output now. Passenger vehicle firms follow suit. Major players treat India as an export base. Yet, challenges linger. Import dependence persists in key components. Auto localisation stands at 70-80 per cent for many models. Premium ones target over 90 per cent. Still, gaps remain, especially in EVs. Government incentives like PLI schemes fuel the shift. They promise Rs 58,000 crore investment by FY28 for advanced parts.
The minister stressed commercial sense. Local parts cut costs sharply. They also meet international benchmarks. Therefore, carmakers gain no choice but to buy in. This trend boosts the economy. Auto component turnover hit $80.2 billion in FY25. It grew 9.6 per cent year-on-year. Exports climbed eight per cent to $22.9 billion. However, India exports just 16.62 per cent of car production. Compare that to Germany’s 93 per cent. The gap highlights untapped potential.
Forging a Resilient Supply Chain Backbone
Auto localisation transforms vulnerabilities into victories. Trade tensions disrupt global flows. India counters with domestic strength. For instance, engineering goods imports topped $16.9 billion from April to August 2025. Auto components form a big chunk. Local production slashes this outflow. It also creates jobs. The sector eyes 2-2.5 million new roles by 2030.
Moreover, quality upgrades matter. Gadkari urged constant improvement. Potholes and dust test builds daily. Robust vehicles last longer. They reduce breakdowns too. Thus, owners save on repairs. Carmakers benefit from loyalty. Policies back this. Import duties on fully built units rose to 70 per cent in 2025. This nudges assembly here.
Expect ripple effects. EVs demand localised batteries and motors. Current efforts lag. Yet, FY26 investments hit Rs 25,000-30,000 crore for EV parts. This bridges the divide. Families afford greener rides. Cities breathe easier. Overall, auto localisation drives sustainability.
Decoding the Untapped Forex Fortress in Auto Localisation
Deeper dives reveal overlooked edges. Most reports tout exports. Few spotlight forex savings. India’s China trade deficit nears $106 billion in 2025. Auto components fuel much of it. Localising just 10 per cent more could save $1.7 billion yearly. That’s based on FY25 import data for parts alone. No headlines flag this yet.
Furthermore, MSMEs anchor 70 per cent of components. They source 90 per cent locally already. Scaling them unlocks rural jobs. Tamil Nadu and Maharashtra lead with 15 and 13 per cent unit shares. Yet, northern states like Haryana lag at eight per cent. Balanced growth evens the field. Policy tweaks, like eased credit, speed this.
Unique data emerges from ACMA reports. Value-added manufacturing grew 14 per cent CAGR since FY20. It outpaces volume. This shift means higher margins. For buyers, prices drop five per cent on localised models. Importers face hikes. Thus, a virtuous cycle spins.
Gadkari’s vision positions India for $200 billion components by 2030. Imports fall. Exports soar. Jobs multiply. The auto sector, now seven per cent of GDP, doubles impact. Challenges like skill gaps persist. Training programmes address them. In sum, auto localisation isn’t optional. It redefines India’s global roar.
