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Global auto component supply chains shift to India

Post COVID, Indian auto component manufacturers are receiving larger than ever export orders, thus adding extra capacities to fulfil global demand.
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While the potential opportunity for Indian auto component manufacturers to become the global factory was being voiced for about a decade now, but it seems post COVID this concept is gradually taking shape as many of the OEM manufacturers which earlier used to source from China and Europe are shifting their supply chains to India. This change is largely reflected in the order books of Indian component manufacturers, which have seen a gradual increase in the past three years.

Following the semiconductor shortage that occurred during the COVID times, the China-US stand off, the Russia-Ukraine war and the recent Red Sea crisis have forced global OEMs to rewire their supply chains and India has emerged as the potential destination for sourcing quality components, making a departure from China and Europe. Indian component manufacturers are expected to invest around $7 billion in infrastructure and technology upgrade to take up the rise in orders.

Farm and construction equipment manufacturer Escorts Cubota has started sourcing locally its engine components for manufacturing tractors in India. It is planning a greenfield facility in Rajasthan.

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