{"id":41048,"date":"2025-04-12T19:25:06","date_gmt":"2025-04-12T13:55:06","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=41048"},"modified":"2025-04-12T19:25:19","modified_gmt":"2025-04-12T13:55:19","slug":"powering-india-global-value-chains-report","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/12-04-2025\/powering-india-global-value-chains-report","title":{"rendered":"Powering India\u2019s Participation in Global Value Chains Report"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Indian Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>NITI Aayog today released a report titled<strong> \u201cAutomotive Industry: Powering India\u2019s Participation in Global Value Chains\u201d.\u00a0<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The report offers an <strong>extensive analysis of India\u2019s automotive sector.<\/strong>\u00a0<\/li>\n\n\n\n<li>It highlights both <strong>opportunities and challenges<\/strong> and <strong>outlines a pathway for positioning India as a key player in global automotive markets.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Major Highlights<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Global Context &amp; Trends:<\/strong> Battery manufacturing hubs are emerging in regions like <strong>Europe and the U.S.<\/strong>, these developments are <strong>altering traditional supply chains <\/strong>and creating new opportunities for collaboration.\n<ul class=\"wp-block-list\">\n<li><strong>The rise of Industry 4.0<\/strong> is transforming automotive manufacturing Technologies such as Artificial Intelligence (AI), Machine Learning (ML), Internet of Things (IoT), and robotics.\u00a0<\/li>\n\n\n\n<li>These digital advancements are<strong> fostering new business models centered around smart factories and connected vehicles.<\/strong><\/li>\n\n\n\n<li><strong>Semiconductor chip costs per vehicle are expected<\/strong> to rise from $600 to $1,200 by 2030.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Global Auto Component Market:<\/strong> It is valued at <strong>$2 trillion in 2022; $700 billion is traded globally.<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Global automobile production: <\/strong>Reached approximately 94 million units.<\/li>\n\n\n\n<li>The global market is growing at<strong> 4\u20136% annually due to rising demand.<\/strong><\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>India\u2019s Position: <\/strong>India has emerged as the<strong> fourth-largest global producer<\/strong> after <strong>China, USA and Japan,<\/strong> with an annual production of <strong>nearly six million vehicles.<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>The Indian automotive sector<\/strong> has gained a strong domestic and export market particularly in the<strong> small car and utility vehicle segments.\u00a0<\/strong><\/li>\n\n\n\n<li>India is positioning itself as a<strong> hub for automotive manufacturing and exports with \u2018Make in India\u2019.<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Challenges<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Despite being the fourth-largest automobile producer globally, <strong>India has a modest share (around 3%) in the global automotive component trade, <\/strong>which amounts to approximately $20 billion.\u00a0<\/li>\n\n\n\n<li>The bulk of global trade in automotive components is driven by engine components, drive transmission, and steering systems, but <strong>India\u2019s share in these high-precision segments remains low at just 2-4%.\u00a0<\/strong><\/li>\n\n\n\n<li><strong>India\u2019s automotive sector faces challenges <\/strong>on account of operational cost, infrastructural gaps, moderate GVC integration, inadequate R&amp;D expenditure etc. that hinder its competitiveness in the global value chain (GVC).<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Recommendations<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Operational Expenditure (Opex) Support:<\/strong> To scale up manufacturing capabilities, with a focus on capital expenditure (Capex) for tooling, dies, and infrastructure.<\/li>\n\n\n\n<li><strong>Skill Development: <\/strong>Initiatives to build a talent pipeline critical for sustaining growth.<\/li>\n\n\n\n<li><strong>R&amp;D, Government facilitated IP transfer and Branding:<\/strong> Providing incentives for research, development, international branding to improve product differentiation and empowering MSMEs through IP transfers.<\/li>\n\n\n\n<li><strong>Cluster Development: <\/strong>Fostering collaboration between firms through common facilities such as R&amp;D and testing centers to strengthen the supply chain.<\/li>\n\n\n\n<li><strong>Industry 4.0 Adoption: <\/strong>Encouraging the integration of digital technologies and enhanced manufacturing standards to improve efficiency.<\/li>\n\n\n\n<li><strong>International Collaboration:<\/strong> Promoting joint ventures (JVs), foreign collaborations, and free trade agreements (FTAs) to expand global market access.<\/li>\n\n\n\n<li><strong>Ease of Doing Business:<\/strong> Simplifying regulatory processes, worker hour flexibility, supplier discovery &amp; development and improving business conditions for automotive firms.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Way Ahead<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The report envisions the country\u2019s automotive component production growing to <strong>$145 billion, with exports tripling from $20 billion to $60 billion.<\/strong>\u00a0<\/li>\n\n\n\n<li>This growth would lead to a <strong>trade surplus of approximately $25 billion <\/strong>and a significant increase in India\u2019s share of the global automotive value chain,<strong> from 3% to 8%.<\/strong><\/li>\n\n\n\n<li>Additionally, this growth is expected to generate <strong>2-2.5 million new employment<\/strong> opportunities.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Conclusion<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>India has significant potential to become a global leader in the automotive industry.\u00a0<\/li>\n\n\n\n<li>Achieving this goal requires focused efforts from the central and state governments, as well as industry stakeholders.<\/li>\n\n\n\n<li>By addressing the existing challenges and leveraging the proposed interventions, India can enhance its competitiveness, attract investments, and build a robust automotive sector capable of leading the global value chain.<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.newsonair.gov.in\/niti-aayog-releases-report-on-automotive-sectors-global-competitiveness\/\" rel=\"nofollow noopener\" target=\"_blank\"><strong>AIR<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<h3><strong>Context<\/strong><\/h3>\n<li class=\"ms-5\">NITI Aayog today released a report titled \u201cAutomotive Industry: Powering India\u2019s Participation in Global Value Chains\u201d.\u00a0<\/li>\n<p><\/p>\n<h3><strong>About<\/strong><\/h3>\n<li class=\"ms-5\">The report offers an extensive analysis of India\u2019s automotive sector.\u00a0<\/li>\n<li class=\"ms-5\">It highlights both opportunities and challenges and outlines a pathway for positioning India as a key player in global automotive markets.<\/li>\n<p><a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/12-04-2025\/powering-india-global-value-chains-report\" class=\"btn btn-primary btn-sm float-end\">Read More<\/a><\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-41048","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/41048","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=41048"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/41048\/revisions"}],"predecessor-version":[{"id":41078,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/41048\/revisions\/41078"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=41048"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=41048"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=41048"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}