Auto-Component Firms Tap into India’s Expanding Electronics Sector
India’s rapidly growing electronics manufacturing sector is creating new opportunities for auto-component companies, allowing them to utilize their expertise in precision engineering and global supply chains, according to a report by Jefferies Financial Group Inc, a full-service investment banking and capital markets firm.
The electronics sector in the country has grown at a compound annual growth rate (CAGR) of 15 percent from FY16 to FY24, reaching US$ 115 billion. Recognizing its strategic importance, the government aims to quadruple this figure to US$ 500 billion by FY31. However, local value addition remains low at 18-20 percent due to reliance on imported components.
The country’s auto-component industry has already shown global competitiveness, with exports reaching US$ 21 billion in FY24. The Government plans to increase this share to 35 percent by 2030 through the promotion of domestic production and attracting foreign investments. Given their expertise in high-precision manufacturing, auto-component firms are well-positioned to expand into electronics, particularly in non-semiconductor components and assembly services.
With the country rising as a prominent electronics hub, these firms have a unique opportunity to strengthen their presence in global supply chains. The Government’s push for domestic manufacturing and shifting global trade dynamics make this an opportune moment for auto-component companies to enter the electronics sector, possibly marking a significant industrial transformation for India.