Kumaraswamy Urges ₹3.15 Lakh Cr Clean Tech Push for Auto Sector

Shifting From Domestic Growth to Global Export Dominance

For decades, the narrative surrounding India's automotive sector centered on servicing a booming domestic middle class stretching from Mumbai to Bengaluru. Millions of first-time car buyers and two-wheeler purchasers fueled a massive manufacturing expansion, making India the third-largest automobile market globally.

Yet, Kumaraswamy argued that the next phase of industrial maturity demands an outward-looking export strategy that challenges established manufacturing powerhouses in Japan, South Korea, and Germany.

Government data shows that auto component exports reached USD 21.2 billion (approx. ₹1.76 lakh crore) in the previous fiscal year, reflecting steady growth.

However, industry leaders acknowledged that a significant portion of these exports consists of legacy mechanical parts rather than high-value electronic or zero-emission components.

To bridge this gap, the ministry is pushing for deeper integration into global value chains by encouraging joint ventures and technology transfers.

• Auto component exports grew steadily over the past three fiscal years according to official trade data.
• Domestic passenger vehicle sales surpassed 4 million units annually, creating a robust financial base.
• Industry experts noted that shifting toward global standards requires upgrading testing infrastructure and metallurgical laboratories across manufacturing clusters in Pune, Chennai, and Gurugram.

"The ministry will continue to work closely with ACMA, SIAM, and industry stakeholders to improve scheme implementation, resolve operational issues, and create an enabling environment for investment and innovation," Kumaraswamy said during his keynote address. Analysts observed that foreign buyers increasingly demand strict environmental, social, and governance (ESG) compliance alongside competitive pricing. Indian firms must audit their supply chains for carbon footprints, ensuring that factories running on coal-fired grids transition rapidly to solar and wind power. Several Tier-1 suppliers in Gujarat and Tamil Nadu have already initiated solar rooftop installations to meet these emerging export requirements. Meanwhile, smaller component makers face liquidity hurdles when attempting to upgrade machinery for precision EV component manufacturing. Industry associations have requested targeted credit guarantees from state-backed financial institutions to ensure that MSMEs are not left behind in the race toward global mobility standards.

Hydrogen Fuel Cells Emerge as USD 37.8 Billion Opportunity

While battery electric vehicles dominate headlines in urban commuter segments, long-haul trucking and heavy commercial transport present unique weight and refueling challenges that chemical batteries struggle to solve. Recent market intelligence reports indicate that the global hydrogen-based vehicles market is projected to reach USD 37.8 billion (approx. ₹3.15 lakh crore) by 2035, driven by aggressive global decarbonization targets and rapid advances in fuel cell technology.

Kumaraswamy highlighted hydrogen as a critical frontier where Indian engineering firms can secure early-mover advantages if they commit capital today rather than waiting for mature Western markets to dictate standards.

• Global hydrogen vehicle market forecast points to USD 37.8 billion valuation by 2035.
• Heavy commercial vehicle manufacturers in India are testing hydrogen internal combustion engines and fuel cell prototypes.
• Rising pressure to reduce carbon emissions across logistics corridors is accelerating infrastructure investments.

Industry insiders noted that India's abundance of renewable energy makes it an ideal location for green hydrogen production through water electrolysis. Major energy conglomerates in India have already announced multi-billion-dollar investments in green hydrogen plants, aiming to drive down production costs below USD 2 per kilogram by the end of the decade. Analysts pointed out that integrating these domestic green hydrogen supplies with indigenous fuel cell manufacturing could transform India into a net exporter of heavy-duty zero-emission trucks. Transport sector analysts explained that while passenger cars gravitate toward lithium-ion batteries, buses and multi-axle freight carriers moving across the Golden Quadrilateral highway network will likely adopt hydrogen propulsion due to rapid refueling times and superior payload capacity. The government's National Green Hydrogen Mission provides financial incentives for electrolyzer manufacturing and pilot projects, aligning closely with the Heavy Industries Ministry's broader vision for advanced automotive technologies. Component manufacturers specializing in valves, high-pressure tanks, and platinum catalysts are already retooling their assembly lines to tap into this nascent supply chain before international competitors saturate the market.

Deepening Localisation and Securing Critical Mineral Supply Chains

Building for the world requires absolute mastery over the underlying supply chain, from raw chemical refining to final electronic control unit (ECU) programming. Past manufacturing disruptions during global semiconductor shortages and geopolitical friction exposed the vulnerability of importing critical electronic components and rare earth magnets from single-source nations.

Kumaraswamy emphasized that domestic value addition and indigenous design capabilities must replace simple assembly operations if Indian manufacturing is to withstand future external shocks.

• Production-Linked Incentive (PLI) schemes for automobiles and auto components have disbursed substantial capital to encourage domestic value addition.
• Local sourcing of battery management systems and power electronics remains a key technical hurdle for domestic firms.
• Government officials confirmed that ongoing diplomatic efforts are securing lithium and cobalt mining concessions in South America and Africa for Indian state-owned enterprises.

"Design and domestic value addition have become critical to India's transition toward electric and cleaner mobility," Kumaraswamy told the ACMA delegates, stressing that intellectual property must originate within Indian R&D centers. Industry veterans noted that domestic automakers are establishing dedicated engineering hubs in Bengaluru and Pune, hiring thousands of software and mechanical engineers to design proprietary EV platforms from scratch. This intellectual shift reduces royalty outflows to foreign parent companies and allows local firms to tailor vehicles specifically for rugged road conditions and extreme ambient temperatures prevalent across South Asia. Analysts observed that while raw material imports for battery cells will take time to replace entirely, domestic recycling ecosystems are scaling up rapidly to recover nickel, cobalt, and lithium from spent batteries. Several startups in southern India have commercialized urban mining plants capable of extracting battery-grade metals with high recovery rates. These closed-loop supply chains not only insulate manufacturers from volatile international commodity prices but also satisfy stringent European carbon traceability regulations required for future vehicle exports.

Navigating Regulatory Headwinds and the Road to 2030

Translating ministerial vision into factory-floor reality requires navigating complex regulatory frameworks, high capital costs, and shifting consumer expectations across diverse demographic segments. As India targets 30% electric vehicle penetration across new vehicle sales by 2030, automotive executives face mounting pressure to balance short-term profitability with long-term technological investments.

Kumaraswamy assured industry leaders that the government remains committed to fine-tuning existing incentive structures to ease financial burdens during this capital-intensive transition phase.

• Government production-linked schemes continue to support domestic capital expenditure for advanced automotive technology.
• Industry associations have called for extended tax benefits on hybrid and alternative fuel vehicles to bridge the gap toward full electrification.
• Consumer adoption rates depend heavily on the rapid expansion of public charging and hydrogen refueling infrastructure along national highways.

"We are listening closely to operational concerns and will ensure policy stability supports sustainable growth," senior ministry officials confirmed following the closed-door discussions at the ACMA session. Market researchers noted that while urban consumers in cities like Delhi, Mumbai, and Bengaluru readily embrace electric two-wheelers and passenger cars, semi-urban and rural buyers demand rugged, affordable alternatives with proven resale values. Component manufacturers must therefore design modular architectures that accommodate both internal combustion engines and electric powertrains during the interim transition decade. Analysts pointed out that India's unique cost-conscious consumer base forces local engineers to innovate frugally, creating affordable technological solutions that often outperform expensive Western counterparts in developing markets across Africa and Southeast Asia. As global automotive supply chains continue to realign, Kumaraswamy's call for bold investments serves as a strategic marker for an industry determined to transition from a regional manufacturing base into an undisputed global mobility titan by the next decade.