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India's Automotive Manufacturing Policy—Economic Impact and Growth Opportunities
India's Automotive Manufacturing Policy—Economic Impact and Growth Opportunities
Incentive Scheme for Automotive Production to Generate $45.2 Billion in Indirect Output, Driving Manufacturing Growth Potential
26-Jul-2023
South Asia, Middle East & North Africa
Market Research
Description
This research service focuses on the economic impact of India’s automotive manufacturing policy, particularly the automobiles and auto components production-linked incentive (PLI) scheme. Following the outbreak of the COVID-19 pandemic and the subsequent shocks to global supply chains, India launched 14 PLI schemes across various industries as a crucial policy initiative to drive manufacturing sector development and attract new manufacturing investments.
The automobile PLI scheme extends sales value-linked financial incentives to battery electric vehicles, hydrogen fuel cell automobiles, and auto components. This study undertakes an economic impact assessment to examine the effect of the automotive PLI scheme on the Indian market in terms of output, employment, wages, and spending. The framework of this economic impact relies on the Leontief input/output (I/O) model.
The automotive PLI scheme will generate output and jobs in the automotive industry with a multiplier effect across the Indian economy. For example, increased car production will drive higher demand for metals, batteries, and other raw materials and components, creating additional output and employment in allied industries. Hence, the final economic result considers direct, indirect, and induced impacts. This study also highlights the growth opportunities in India’s manufacturing and automotive industry arising from a combination of supportive government policies, supply chain diversification trends, and the sustainability push.
Key Issues Addressed
- What is the strategic imperative behind the fortification of India’s manufacturing sector?
- What ripple effects will the automotive PLI scheme generate across allied industries and the larger economy?
- What will be the 2026 direct output, gross value-add, and employment impact of the PLI scheme?
- How do the indirect and induced impacts of the automotive PLI scheme compare to the direct impact?
- What is the per second and year output of the automotive PLI scheme?
- What growth opportunities does India present as it seeks to build local automotive and supply chain manufacturing capabilities and drive sustainability?
Author: Rituparna Majumder
Table of Contents
Why is it Increasingly Difficult to Grow?
The Strategic Imperative 8™
The Impact of the Top 3 Strategic Imperatives on the Indian Economy
Growth Opportunities Fuel the Growth Pipeline Engine™
India’s Manufacturing and Automotive Industry—Overview
I/O Table and Leontief Multiplier—Introduction
Economic Impact Assessment—Overview of Impact Forms
Economic Impact Assessment—Types of Impact Analysis
Key Findings on the Impact of the Automotive PLI Scheme
Manufacturing Growth Drivers
Manufacturing Growth Restraints
Vision and Policy Support for Manufacturing
PLI Schemes—Deep Dive of Automotive PLI Scheme
Direct Impact Analysis
Indirect Output and GVA Impact Analysis
Indirect Employment Impact Analysis
Induced Impact Analysis
B&MV’s Contribution to the Indian Economy
Impact Findings of the PLI Scheme on Batteries and Vehicles
Total Economic Output Impact
Sectoral Share in Output and GVA
Total Employment Impact
Impact on Labor Compensation
Growth Opportunity 1—Manufacturing and Infrastructure Boost from PLI and Global Supply Chain Reorientation
Growth Opportunity 1—Manufacturing and Infrastructure Boost from PLI and Global Supply Chain Reorientation (continued)
Growth Opportunity 2—Battery Electric and Hydrogen Fuel Cell Vehicles Supply Chain
Growth Opportunity 2—Battery Electric and Hydrogen Fuel Cell Vehicles Supply Chain (continued)
Growth Opportunity 3—Lithium-ion Battery and Supply Chain Growth
Growth Opportunity 3—Lithium-ion Battery and Supply Chain Growth (continued)
Industry Segments
Multiplier by Industry Segment
Multiplier by Industry Segment (continued)
Employment Statistics by Industry Segment
List of Exhibits
List of Exhibits (continued)
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Key Issues Addressed
- What is the strategic imperative behind the fortification of India’s manufacturing sector?
- What ripple effects will the automotive PLI scheme generate across allied industries and the larger economy?
- What will be the 2026 direct output, gross value-add, and employment impact of the PLI scheme?
- How do the indirect and induced impacts of the automotive PLI scheme compare to the direct impact?
- What is the per second and year output of the automotive PLI scheme?
- What growth opportunities does India present as it seeks to build local automotive and supply chain manufacturing capabilities and drive sustainability?
Author: Rituparna Majumder
| Deliverable Type | Market Research |
|---|---|
| Author | Rituparna Majumder |
| Industries | Cross Industries |
| No Index | No |
| Is Prebook | No |
| Keyword 1 | Automotive Industry |
| Keyword 2 | Automotive Manufacturing Policy |
| Keyword 3 | India Economic Growth |
| Podcast | No |
| WIP Number | 9AE5-00-46-00-00 |