India Emerges as the 3rd Biggest Vehicle Manufacturer: Union Minister Nitin Gadkari

Union Minister for Road Transport and Highways, Nitin Gadkari announced that India is now the third-largest vehicle manufacturing country in the world. He made this statement during the 4th International BBB Summit & Expo on Bioenergy Value Chain in New Delhi. The Minister noted the rapid development of the Indian automobile industry and pointed at the necessity for cutting fossil fuel consumption, while expanding the exports and curbing the imports.

Key Highlights:

Context:

• Union Minister for Road Transport and Highways, Nitin Gadkari, announced that India is now the 3rd largest vehicle manufacturing country in the world.

Automobile sector in India

• The Indian automobile industry has been a key barometer of the health of the economy of the country, the industry had been crucial to both macroeconomic growth and innovation in technology. 

• India, dominated by the two wheeler segment is growing with the advent of a young demographic, a growing middle class and heightened interest in rural markets.

Growing Demand

• Rising demand of middle-class income and young population

• More people want to purchase EVs.

• Dec 2024 Production:

  • Total vehicles: 19,21,268 units (passenger, 3-wheelers, 2-wheelers, quadricycles)

• Electric Vehicle Market

  • Global EV market (2021): $250 billion

  • Projected (2028): $1,318 billion

  • India to be a leader in shared, electric and autonomous mobility by 2030

Opportunities for Growth

• Highest EV market projection in 2030 would belong to India.

• Investment potential: Over $200 billion

• FDI inflow (Apr 2000 – Sept 2024): Rs. 3,22,015 crore (~US$ 36.21 billion)

Policy Support

• PM E-DRIVE Scheme (October 2024 – March, 2026)

  • Budget: Rs. 10,900 crore (~$1.30 billion)

  • Focus:

    • EV adoption

    • Charging infrastructure

    • EV manufacturing ecosystem

• Automotive Mission Plan 2026: 

  • With a view to making India, one of the greatest world leaders in the automobile sectors by 2026.

• Scrappage Policy: 

  • Promoting the elimination of old cars that increases the demand for new ones.

• Production-Linked Incentive (PLI) Scheme: 

  • Creation of thrust on manufacturing and innovation in the auto sector to make India the key player in both domestic and international market.

Conclusion:

India’s place as the world’s third largest vehicle manufacturer gives reflection to the expansion and viability of its car industry. On the back of great emphasis on electric vehicles, considering the growing clamour from the youth and middle class population, India is in the driver’s seat to dominate the global mobility industry. Government policy support in combination with heavy investments will add clout to India’s position in the world automobile market.

UPSC Prelims PYQ (2012)
Q: What recent policy initiative(s) has/ have the Government of India taken to boost the manufacturing sector?

• Establishment of the National Investment and Manufacturing Zones.
• Giving the advantage of ‘single window clearance’
• The creation of the Technology Acquisition and Development Fund

Choose the correct option with the help of codes given below:

(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3