Report Shows How Automotive Components and Electronics Have Immense MSME Potential


According to a major report, India is steadily emerging as a global auto components hub along with being geographically close to major automotive markets like Japan, ASEAN, Europe and Korea.


The MSME Report 2015 published by the Institute of Small Enterprise and Development (ISED), Kochi, was launched by SS Mundra, the Deputy Governor of the Reserve Bank of India at the World Trade Centre in Mumbai on Thursday. According to the report, India offers considerable cost competitiveness in relation to vital raw materials such as steel.


According to the Automotive Component Manufacturers Association (ACMA), component export volumes would touch a staggering $9.4 billion in 2015 which indicates the huge potential of this sub sector. MSME contribution is not immediately visible but scaling up is a solution for boosting productivity levels and overall quality standards. India already has a Target 2020 of meeting the projected demand of $400 billion but this requires strategic action on several counts.


Make in India has suitably identified automobiles as a vital sector, auto component industries have to be properly tapped in the MSME segment. A sub sector context needs to be taken according to the report. The report also talked of electronics and how demand is set to reach $400 billion by 2020. However, the manufacturing base should be ramped up to meet such levels of demand. The import value of electronics should cross oil import values by 2020 owing to negligible manufacturing bases.


The government has set an ambitious target of zero imports in electronics under its Digital India programme. India has to be made a hub for electronics manufacturing both for exports and domestic consumption. MSME start-ups in automotive components and electronics segments should be focused on and this will bolster the Make in India blueprint. Governmental focus on automobile components will definitely boost overall vehicle production in the country.


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