Indian Motor Vehicle Industry Surpasses ₹20 Lakh Crore in FY 2023-24, Contributing 15% to GST

India’s motor vehicle industry surpassed the milestone of ₹20 lakh crore in the fiscal year 2023-24, now contributing around 14-15% to the total Goods and Services Tax (GST) collected in the country. Vinod Aggarwal, President of the Society of Indian Automobile Manufacturers (SIAM), spoke at the 64th annual session of the Automotive Component Manufacturers Association (ACMA) in Delhi on September 9. He highlighted the significant role the motor vehicle sector plays in generating both direct and indirect employment across the nation.

Aggarwal stated that the Indian motor vehicle industry crossed the ₹20 lakh crore mark in FY 2023-24. He emphasized that the sector contributes nearly 14-15% to the total GST collected in India. Furthermore, he noted that the industry’s contribution to the country’s Gross Domestic Product (GDP), currently at 6.8%, is set to grow. According to him, it’s not just the growth in numbers that matters, but also the technological advancements that are equally critical.

Aggarwal pointed out that India has become the third-largest passenger vehicle market, the largest two-wheeler and three-wheeler market, and the third-largest commercial vehicle market globally. He remarked that these achievements come at a time when the country is aiming to become a developed nation by 2047. The motor vehicle industry is poised to grow even further and play a crucial role in India’s development. To reduce dependence on imports, the industry has identified 50 key factors for enhancing local production.

Aggarwal also noted that SIAM, in collaboration with ACMA, has embarked on a journey to boost indigenous manufacturing and has set ambitious targets to increase localization. He shared that the industry is committed to reducing the import content from 60% in 2019-20 to 20% by 2025, with an aim to cut import costs by ₹20,000 to ₹25,000 crore over the next five years. The first phase has already been successfully completed, with a 5.8% reduction in imports in the initial two years.

ACMA President Shraddha Suri Marwah also addressed the annual session, stating that the industry is eagerly awaiting the third edition of the Automotive Mission Plan. She highlighted that the industry faces various challenges, especially in addressing skill gaps and maintaining international quality standards. Therefore, collaboration with academic institutions and investment in skill development is essential. Marwah emphasized the growing demand for electronic components and semiconductor chips, underscoring the need for strategic alliances in the sector.