In Short:
China is a big player in the electric vehicle market, with India also aiming to grow in this sector. China is a major exporter of EVs and components, with a significant impact on India’s imports and automotive industry. Chinese companies are looking to enter the Indian market, which could have potential benefits but also risks of over-dependence. India recently reduced import duties on EVs to attract more foreign investment.
China’s Robust Automotive Industry: A Closer Look
China’s automotive industry has been making waves, with substantial governmental backing propelling its growth, especially in electric vehicle (EV) technology. This support has not only made China a leading exporter of EVs but also associated components.
India’s E-Vehicle Production Hub: A Promising Future
India is gearing up to establish itself as a hub for e-vehicle production, with significant contributions from the private sector. This move is anticipated to lead to a surge in reliance on auto component imports from China, according to a recent report.
Rise in Auto Component Imports from China
India’s auto component imports in the fiscal year 2022-23 totaled $20.3 billion, with China accounting for 30 percent of this figure. As electric vehicles gain traction in India, the report predicts a further increase in imports from China, given its strong influence in the global supply chain for EV components.
Chinese Manufacturers Poised to Capture Indian Market
The report suggests that in the near future, around one-third of electric vehicles on Indian roads could come from Chinese manufacturers, either independently or through joint ventures with Indian counterparts. Ajay Srivastava, founder of **GTRI**, emphasized the vital opportunity that the Indian market presents for Chinese firms.
According to Srivastava, “China’s EV exports to the European Union and the United States are declining due to various factors, making the Indian market a key focus for Chinese manufacturers seeking growth.”
Chinese Influence in India’s Automotive Sector
Several Chinese companies, such as Changan Automobile, Jinko Solar, Zhongtong Bus, Foton Motor, Great Wall Motors, and Haima Automobile, are looking to enhance their presence in India’s automotive landscape. This indicates a significant rise in Chinese influence in the country’s automotive sector.
India’s Automotive Industry Landscape
India’s automobile industry now contributes 7.1 percent to the nation’s GDP, a substantial increase from 2.8 percent in 1992-93. The industry provides direct and indirect employment to over 19 million people.
Challenges Ahead
The increasing presence of Chinese automakers in India is expected to impact domestic auto/EV manufacturers, firms in the EV value chain space, and battery development. With nearly a quarter of India’s auto component imports currently coming from China, the country’s reliance on Chinese suppliers is set to intensify.
India’s EV Policy Updates
India recently announced a new Electric Vehicle (EV) policy, reducing import duties on four-wheeled electric vehicles from 70-100% to just 15%. These reductions will be available to foreign companies investing a minimum of USD 500 million in India’s booming EV sector.
(With inputs from PTI)
