India needs to reassess the design and scope of its PLI-Auto scheme to lift its stagnant 1% share in global automobile exports, unchanged for over a decade, NITI Aayog highlighted in the latest edition of its Trade Watch Quarterly released on Tuesday. The scheme’s tilt towards electric vehicles and a 50% domestic value-addition threshold restrict participation, especially by start-ups and smaller firms, dampening investment momentum even in pure EV segments.
“A mid-course review of the scheme could help broaden its coverage, consider the inclusion of non-EV segments, and recalibrate eligibility norms to support a more inclusive and investment-friendly framework,” the report said.
India’s share in global automobile demand has remained stagnant at around 1% over the past decade, while its share in auto components exports has seen only a marginal increase—from about 1.2% to 2%. Although global EV imports surged nearly 30-fold between 2020 and 2024, India’s participation remains negligible at about 0.1% of global exports and imports, “underscoring a widening gap between global momentum and India’s trade footprint,” the report noted.
Other roadblocks for Indian exporters include logistical challenges, lack of branding, and cost disadvantages. While Indian automotive products are gaining global recognition for quality, an influx of low-cost, substandard imports continues to distort markets. Industry experts stressed the need for tighter quality norms, stricter action against dumping, and a stronger role for IBEF to boost “Made in India” branding through trade fairs and overseas market linkages.
The report also highlighted that for India to scale up its global export share, the sector needs to become more manufacturing-led. While the report underscored the importance of focusing on EV exports, it also flagged the need to reduce import dependence on China.
“India’s EV battery ecosystem remains largely assembly-oriented rather than manufacturing-led. While cell and battery pack production has begun, critical inputs such as cathode and anode materials, electrolytes, separators, and refined lithium, cobalt, nickel, and manganese continue to be predominantly imported from China,” the report said. This dependence curbs domestic value addition, weakens supply-chain resilience, and undermines India’s EV manufacturing competitiveness, as cost disadvantages persist despite PLI incentives, making imports the cheaper option for manufacturers.