NEW DELHI: Despite a call by India to reduce its dependency on Chinese products, the neighbouring country continues to remain India’s biggest importer of auto components. In financial year 2022 (FY22), total value of auto components imported from China grew by 35% year-on-year to USD 5.46 billion, as per data issued by the Automotive Component Manufacturers’ Association of India (ACMA).
“Asia with China dominates the guest countries we import from and China remains the largest importer. In fact, a third of our imports come from China and imports from the neighbouring nation alone witnessed a strong growth of 35%from USD 4.03 billion in FY21 to USD 5.46 billion in FY22,” said Vinnie Mehta, Director General, ACMA. Germany was a distant second, accounting for only about 11% of auto component imports.
India government has taken a proactive approach to reduce its dependency on China as tension between the two countries remains high following a clash between their troops in the Galwan Valley in 2020. In addition, India launched its ambitious production-linked incentive (PLI) scheme in the sector to attract global companies to manufacture in the country and become an alternative supply chain destination.
However, it is unlikely that dependency on China for the sector will slow down anytime in near future.
“Dependence on China exists and it is not going to go away overnight. We will have to continue investing in technologies to reduce this dependency,” said Sunjay Kapur, ACMA president & chairman of Sona Comstar.
He added that different companies will have to look at different methods and different solutions to replace this dependency. According to ACMA, India’s auto component industry had its highest-ever turnover of `4.2 lakh crore in FY22 -- a growth of 23% over the last fiscal. The growth comes despite headwinds such as chip shortage, high raw material prices and lower two-wheeler sales.