THEBUSINESSBYTES BUREAU

NEW DELHI, SEPTEMBER 2, 2026

Commerce and Industry Minister Piyush Goyal on Wednesday called upon the auto component industry to transform local businesses into global enterprises, expand manufacturing footprints in developed markets and move up the value chain as India seeks deeper integration with the global economy.

Addressing the 66th Annual Session of the Automotive Component Manufacturers Association (ACMA) here, Goyal said the industry's international trade was currently close to USD 50 billion, evenly divided between imports and exports, and stressed the need for greater international investment and more Indian businesses emerging as global players.

"Business prospers when it looks globally," Goyal said, while noting that imports can also contribute to a country's economic progress, though this should not be construed as an encouragement to increase imports.

He said there was a commitment to widen the gap between India's imports and exports, but that process had not yet begun, and called for significantly greater international investment and global business expansion by ACMA members.

"The industry has to now expand its manufacturing footprint across the world and establish a presence in developed countries," he said.

Goyal said the Indian auto component industry had benefited from collaborations over the years and had developed the capability to manufacture quality products at globally competitive price points.

He highlighted India's expanding market access through nine trade agreements finalised over the last four to five years, covering 38 developed countries and economies representing a combined GDP of USD 60 trillion.

In contrast, the free trade agreements concluded before 2014 collectively represented economies accounting for about USD 10 trillion in GDP at today's value, he said.

The minister said the new agreements provide two-way market access to prosperous economies with high GDP and per capita income, offering Indian industry greater complementarity and relatively lower competitive pressures.

Goyal also credited ACMA with playing an important role in India's FTA negotiations, saying the industry body had consistently sought zero-duty access for Indian auto components while also supporting reciprocal opening of the domestic market.

"The industry is capable of taking on the best in the world and is ready to meet global competition," he said.

Referring to the theme of the session — "Beyond Resilience, managing uncertainty to creating new avenues, deeper supply chains" — Goyal said it was particularly relevant amid global uncertainty, geopolitical challenges and considerable churn.

Despite the turmoil, India had stayed the course and remained the fastest-growing among the world's large economies, he said.

"The naysayers can say what they want, but 7.8 per cent growth is a reality," Goyal said.

He highlighted strong growth across manufacturing and automotive segments, saying ACMA was growing at a scorching double-digit rate and the auto sector was also expanding at a high double-digit pace.

Around five million passenger cars are expected to be sold this year, Goyal said, adding that these vehicles were being purchased rather than merely being stocked.

He also pointed to rising demand for electric vehicles, with some models now carrying waiting periods of up to six months.

The minister said the steel sector was likewise witnessing rapid growth, with India importing more steel than it exported because domestic demand remained exceptionally strong. The auto component industry, he added, was contributing significantly to this demand.

Goyal outlined several government initiatives aimed at strengthening industrial capacity and building resilient supply chains, including support for the auto component industry to achieve scale and measures to promote domestic production of speciality steel required by the sector.

He also highlighted the relevance of the production-linked incentive scheme for technical textiles, given the industry's dependence on such materials, as well as government support for the semiconductor sector to strengthen the resilience of automotive supply chains.

The government is also developing new industrial parks, with 20 smart cities and industrial cities already underway, he said, inviting the auto component industry to participate in these opportunities.

Goyal also proposed dedicated industrial parks for automotive components and partnerships with other countries.

"Maybe we should have one of these parks dedicated to a US-India partnership. Maybe we can have two or three, five parks, which will be for auto components only. And I can create a plug and play infrastructure to suit you," he said.

Calling for sustained industry-government dialogue, Goyal said the pace of reforms could be accelerated only with active participation from industry.

"We need your ideas. We need your inputs. We need your demands. We need to know what's challenging you, what's troubling you, how we can help you more," he said.

"We are a listening government. We want you to be talking," he added.

Goyal referred to his recent three-hour interaction with the data centre industry, which he said comprised largely US companies entering India in a big way.

India and the US are trusted partners and can work together to make their industries more competitive, he said.

He also said India would soon have a Gulf Cooperation Council (GCC)-India free trade agreement once the situation in the region stabilises, and would pursue FTAs with other countries to secure greater access to critical minerals needed for resilient supply chains.

Referring to the critical minerals partnership between India and the US, Goyal also highlighted the Pax Silica initiative launched by Washington, under which like-minded, democratic and fair-play countries can work together to ensure that no single geography is able to weaponise trade.

These developments, he said, would help the auto component sector emerge as a truly global player as it works towards its USD 500 billion industry target.

Goyal urged the industry to convert local businesses into global enterprises and establish active indigenisation programmes for products where greater supply-chain resilience is required.

Such efforts, he said, would help the sector insulate itself from future "black swan" events.

He also called for the industry to move up the value chain and deliver integrated, high-value solutions, including products designed, built and supplied to global customers at the highest quality standards.

Greater attention must also be paid to safety, Goyal said, stressing that the industry should not leave safety concerns entirely to the government.

Technology, including artificial intelligence, should play a bigger role in the sector, particularly in quality control and assessing customer requirements, he said.

Pointing to the growing popularity of customised vehicles in the US and Europe, Goyal called for greater innovation and improved safety features in automotive products.

On vehicle scrappage, the minister said the government and industry needed to make scrapping old vehicles a profitable and valuable proposition for consumers purchasing new vehicles.

The government had attempted to provide value and incentives from its side, he said, and called upon industry to offer fair value for scrapped vehicles to help create a larger market for new-generation automobiles.

US Ambassador to India Sergio Gor said bilateral cooperation in the automotive sector was at a "historic high point", with the two countries "co-designing the future of mobility together".

He described India's auto component industry as a reliable and increasingly sophisticated partner in strengthening supply-chain resilience.

Gor said both governments were working towards a fair, reciprocal and mutually beneficial trade relationship and highlighted the progress made, including the trade understanding reached between the two countries.

He said Goyal would travel to the US at the end of the month as Washington hosts the G20 talks.

The US envoy also highlighted expanding cooperation in pharmaceuticals, defence, IT, data centres and space, and described the Pax Silica Declaration as a landmark step towards a pro-innovation regulatory framework.

India was among the first countries invited to join the initiative, he said.

Gor pointed to the growing presence of US companies in India's automotive ecosystem and Indian companies in the US, including Bharat Forge, Sundaram Clayton and Mahindra.

He invited Indian auto component manufacturers to explore investments in the US through greenfield assembly facilities, R&D centres and distribution networks.

Trade Commissioner for South Asia and British Deputy High Commissioner for Western India Harjinder Kang, meanwhile, highlighted the strengthening India-UK economic relationship, saying automotive and future mobility were central to the UK's advanced manufacturing capabilities.

Kang referred to the India-UK Vision 2035, the UK's modern industrial strategy and the India-UK Comprehensive Economic and Trade Agreement (CETA), which came into force on July 15, 2026.

Under CETA, 99 per cent of UK tariff lines and 90 per cent of Indian tariff lines have been reduced to zero or very low duties, alongside streamlined customs and border procedures to facilitate trade and investment, he said.

The agreement would deepen supply chains and enable joint ventures and partnerships, with automotive component manufacturers gaining tariff-free access to each other's markets, Kang said.

He highlighted the UK's strengths in advanced engineering, innovation and zero-emission vehicle technologies, including electric motors, batteries, hydrogen solutions, lightweight composites and software-defined vehicle systems.