Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The Indian auto industry looks to secure its supply chain and reduce dependence on imports of auto parts from China, says Automotive Component Manufacturers Association of India (ACMA). The association also promotes self-sufficiency, per the government’s motto of ‘Atmanirbhar  Bharat’.  


Most auto firms have put in place de-risking strategies and companies are now looking at ‘China plus one strategy’. The strategy aims at diversification of business as a more economical and safer long term option.


Amid India and China’s border tensions, consumer sentiment in India is moving towards ‘homemade’ products. ACMA believes auto companies and the government must work together to achieve this state of self-sufficiency.  The auto industry is expected to deliver technologically relevant products with consistent quality at competitive prices, which needs government cooperation.


In FY19, India imported $17.6bn worth of auto components of which 27pc were from China.


If Indian auto companies start sourcing components produced domestically, it could drive demand for lead, steel, zinc, aluminium, copper among others. These ailing sectors witnessed a huge demand gap due to the lockdown and for some micro and small firms, revival seems to be an uphill task. 

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