The domestic automotive industry has crossed Rs 20 lakh crore mark in FY24 and has the potential to be worth $1.6 trillion (about Rs 134 lakh crore) by 2047, driven by electric vehicles (EVs), according to industry leaders.

The automotive industry in the country is poised to be one of the key growth engines in towards achieving a $32-trillion GDP by 2047, according to Pawan Goenka, Chairman of IN-SPACe at the Department of Space.

Addressing the Automotive Component Manufacturers Association (ACMA) event in the national capital, he said that the automotive industry has the potential to contribute $1.6 trillion by 2047.

The auto sector also contributes significantly to the direct and indirect employment generation in the country, Goenka further said, adding that the auto industry will contribute more and more to the GDP of the country from the current level of around 6.8 per cent. Over the last two decades or so, the industry has grown by 17 per cent CAGR.

The Society of Indian Automobile Manufacturers (SIAM) President Vinod Aggarwal said that the domestic auto industry has identified 50 critical components for local production in order to reduce import dependence.

As most of these items are electrical or electronics, there is a need to develop capabilities and capacities in India for such high tech items, he added.

Aggarwal told the gathering that the Indian automotive industry has crossed a landmark figure of Rs 20 lakh crore in FY24 and is contributing almost 14-15 per cent of the total GST collected in the country.

SIAM, along with ACMA, has voluntarily set targets for increasing localisation. The industry bodies are committed to reduce import content by 60 per cent to 20 per cent by 2025 from the base 2019-20 levels, thereby targeting the reduced reports to the tune of Rs 20,000 to Rs 25,000 crore in five years.

The country has become the third largest passenger vehicle market, the largest two and three wheeler market and third largest commercial vehicle market.

As the adoption of EVs increase in the country, the cost of EVs will almost match petrol and diesel vehicles within the next two years, Union Minister for Road Transport and Highways, Nitin Gadkari, earlier said at the event.