Indian Auto Sector to Hit Rs 15 Lakh Crore, Add 19 Million Jobs
The Indian automotive and ancillary sector is poised to double its size to Rs 15 lakh crore, generating employment for over 19 million individuals by the end of 2023, according to a report released by ICICI Lombard in collaboration with Frost & Sullivan. The report highlights how government policies have buoyed the sector amidst global challenges.
The report projects that the automotive and ancillary sector will contribute 7.1% to India's national GDP. Dominated by two-wheelers, which hold a 77% market share, followed by passenger cars at 18%, the sector is expected to maintain robust growth. India currently ranks second globally in two-wheelers, seventh in commercial vehicles, and sixth in passenger vehicles.
Government initiatives such as ‘Make in India,’ significant investments in infrastructure, and the promotion of sustainable energy management have been crucial in reinforcing the sector's resilience. These policies have supported the sector's expansion and capacity to navigate global headwinds and risks effectively.
"Government initiatives have been instrumental in the sector’s growth and ability to manage global challenges", said Sandeep Goradia, Chief - Corporate Solutions Group at ICICI Lombard.
The report further reveals an enhancement in the Corporate India Risk Index (CIRI), with the risk index score improving from 63 in 2022 to 64 in 2023. This index measures the effectiveness of risk management practices across various industries. The manufacturing, metals and mining, and new-age sectors have shown notable advancements in their risk management scores.
“The improved score is a testament to the efficient risk management practices adopted by Indian corporates in the face of global headwinds and challenges”, Goradia noted.
Aroop Zutshi, Global President and Managing Partner at Frost & Sullivan, added, “The steady improvement in the risk index score for the country as a whole, combined with the fact that there are no sectors below the optimal risk index category, indicates a very positive outlook for Indian corporates”.
The report also emphasized the role of ongoing digital transformation and the integration of AI across sectors, which have significantly enhanced operational efficiencies and risk management practices. These advancements have enabled Indian enterprises to demonstrate resilience and strategic progress despite facing increased risk exposure.
The report projects that the automotive and ancillary sector will contribute 7.1% to India's national GDP. Dominated by two-wheelers, which hold a 77% market share, followed by passenger cars at 18%, the sector is expected to maintain robust growth. India currently ranks second globally in two-wheelers, seventh in commercial vehicles, and sixth in passenger vehicles.
Government initiatives such as ‘Make in India,’ significant investments in infrastructure, and the promotion of sustainable energy management have been crucial in reinforcing the sector's resilience. These policies have supported the sector's expansion and capacity to navigate global headwinds and risks effectively.
"Government initiatives have been instrumental in the sector’s growth and ability to manage global challenges", said Sandeep Goradia, Chief - Corporate Solutions Group at ICICI Lombard.
The report further reveals an enhancement in the Corporate India Risk Index (CIRI), with the risk index score improving from 63 in 2022 to 64 in 2023. This index measures the effectiveness of risk management practices across various industries. The manufacturing, metals and mining, and new-age sectors have shown notable advancements in their risk management scores.
“The improved score is a testament to the efficient risk management practices adopted by Indian corporates in the face of global headwinds and challenges”, Goradia noted.
Aroop Zutshi, Global President and Managing Partner at Frost & Sullivan, added, “The steady improvement in the risk index score for the country as a whole, combined with the fact that there are no sectors below the optimal risk index category, indicates a very positive outlook for Indian corporates”.
The report also emphasized the role of ongoing digital transformation and the integration of AI across sectors, which have significantly enhanced operational efficiencies and risk management practices. These advancements have enabled Indian enterprises to demonstrate resilience and strategic progress despite facing increased risk exposure.
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