“A $32 trillion economy by 2047 is a given, with 25% of that coming from manufacturing. Setting at least 20% from the automotive sector as a clear goal is both reasonable and necessary,” Goenka stated.
09 Sep 2024 | 1134 Views | By Shahkar Abidi
India’s automotive industry is poised to become a significant pillar of the country’s economic future, with expectations of contributing at least $1.6 trillion to a projected $32 trillion Indian economy by 2047. To achieve this target, the sector would need to grow at an average nominal rate of 11% in ...
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India’s automotive industry is poised to become a significant pillar of the country’s economic future, with expectations of contributing at least $1.6 trillion to a projected $32 trillion Indian economy by 2047. To achieve this target, the sector would need to grow at an average nominal rate of 11% in topline revenue in dollar terms, stated Dr. Pawan Goenka, Chairman of SCALE and IN-SPACe at the Department of Space, during his address at the 64th session of the Automotive Component Manufacturers Association (ACMA) in New Delhi.
“A $32 trillion economy by 2047 is a given, with 25% of that coming from manufacturing. Setting at least 20% from the automotive sector as a clear goal is both reasonable and necessary,” Goenka stated. His remarks were were a clarion call for one of India’s most critical industries.
For the automotive sector to hit the $1.6 trillion mark, it must sustain an 11% nominal growth in topline revenue—a level of growth that demands massive investments, technological advances, and supportive government policies. However, Goenka cautioned that domestic demand alone would not suffice, as the local market is unlikely to grow at the required pace. He noted that the 8% growth rate achieved by the industry over the past 23 years is a more realistic yet aggressive benchmark.
Goenka emphasised that the key to reaching this ambitious target lies in exports, with a goal of $900 billion in overseas sales. He further broke down this figure, projecting $500 billion from automotive components and $400 billion from vehicle exports. “It’s not as hard as it sounds; it’s the power of compounding,” Goenka explained, noting that the industry has seen a 17% compound annual growth rate (CAGR) over the past 23 years. At that rate, the sector could theoretically reach $5.3 trillion. “All I am asking for is $1.6 trillion,” he quipped.
Looking ahead, Goenka underscored the importance of transitioning to electric vehicles and the goal of achieving zero carbon sales by 2047, stressing the need for sustainable, safe, and fuel-free mobility solutions.