Ravi Mehra Dec 25, 2025

• # Made in India mobility
• # integrated mobility systems
• # EV localization India
• # auto components exports
• # PLI auto scheme
• # EV powertrain India
• # software defined vehicles India
• # EV supply chain Ind

India’s automotive sector is moving beyond parts to full-stack systems - EV powertrains, software, and smart manufacturing. Will 2026 be the year India truly controls mobility architecture and global supply chains?

There was a time when India’s automotive industry had huge import dependence, assembling vehicles from kits and components coming from across the world and with huge dependence on foreign technology. In 2025, the story reads differently, and the picture couldn’t be more different. Today, India stands as a global hub of innovation and engineering not just for components but entire mobility systems that power the future.

This year 2025 marked to be a turning point. Make in India is no longer about sheer producing in India; it’s about overall capability - owning design, software, and manufacturing as one integrated value chain. The shift is visible in every metric: the auto component sector closed FY?24–25 at a staggering Rs 6.73?lakh crore, growing 9.6 per cent year-on-year while doubling in size over the past five years with a CAGR of 14 per cent. Exports surged to US$22.9?billion, a clear signal that India is not just meeting domestic demand but competing globally.

Self-reliance isn’t a rhetoric anymore; it’s a supply chain reality. The country’s trajectory from rudimentary parts making to full stack systems engineering is visible not only in plant footprints and R&D spend, but in the composition of what is designed, validated and shipped from Indian soil. India’s automotive story is being rewritten, and the next chapter will be even more promising.

The Big Shift: Components ? Integrated Systems
For decades, the ecosystem’s language was mechanical—nuts, bolts, forgings feeding the assembly line. Today, the conversation has shifted to complete systems: EV powertrains, safety modules, smart electronics, and software-driven architectures. India is no longer just making parts; it’s building the heartbeat of tomorrow’s vehicles.

This evolution is visible in the numbers. EV components already account for ~6 per cent of OEM-supplied components, signaling early traction in the systems era. And it’s not just about electrification—integrated safety systems, advanced lighting, and connected electronics are becoming core to India’s manufacturing playbook. A clear signal that India’s value creation is moving up the stack from discrete parts to integrated sub systems. This is the new face of Atmanirbhar Bharat—where design, software, and manufacturing converge.

Why This Matters for India
Atmanirbhar Bharat was never about local assembly alone; it’s about strategic autonomy in the technologies that will define future mobility. The stakes could not be higher. India, now the world’s third-largest auto market, has historically leaned on imported electronics, powertrain systems, and critical raw materials to fuel its growth. That dependence is no longer a benign inconvenience, it is a structural vulnerability in an era of fractured supply chains and geopolitical volatility. True resilience demands more than local capacity; it requires control over design, software, and upstream resources. Without this, India risks being a volume player in a value-driven world.

Policy momentum is unmistakable, and it is reshaping the industry’s priorities. The Production Linked Incentive (PLI) Auto scheme, backed by an outlay of Rs 25,938 crore, is designed to reward advanced automotive technology manufacturing while enforcing a critical threshold: more than 50 per cent domestic value addition. These Domestic Value Addition (DVA) norms are compelling suppliers to rethink their entire operating model, from sourcing strategies to design ownership and upstream integration.

True self-reliance is not just about assembling or making vehicles and components; it is about controlling the architecture. That means owning design IP, embedded software, and the manufacturing intelligence that ensures quality at scale. It means shifting from a cost advantage to an innovation advantage, because global OEMs no longer source on price alone; they source for technology leadership.

EV Localisation as a Strategic Imperative
India’s electric mobility revolution will not be won on assembly lines, it will be won in the ability to own the powertrain. Despite EV sales crossing two million units in FY?24–25, a 24 per cent surge that signals undeniable momentum, the industry remains tethered to imports for its most critical technologies. High-voltage systems, power electronics, and embedded software, the very heart of an EV, are still 70–80 per cent sourced from abroad. Battery cells alone, which make up nearly 40 per cent of an EV’s cost, are fully imported. This dependence is a strategic vulnerability in a world where supply chains fracture overnight and geopolitical tremors dictate technology flows and business continuity.

Localisation is not a checkbox—it is the foundation of scale, cost competitiveness, and sovereignty. India must close this gap, because OEMs will not commit to aggressive EV platforms without a reliable domestic ecosystem for motors, inverters, chargers, and software-defined control units.

Outlook for 2026: What’s Next
If 2025 was about proving India’s capability, 2026 will be about owning the upstream, not just the downstream. The next frontier of Atmanirbhar Bharat lies in securing critical inputs—rare-earth magnets, battery-grade minerals, and power semiconductors—that underpin EV powertrains and advanced electronics. India currently imports nearly all of its lithium and rare earth requirements; when supply tightens, programs stall. That is why ministries are examining policy instruments, from PLI style support for rare earth processing to customs relief on battery and motor manufacturing lines, to de risk the EV supply chain at source.

The industry is already signaling a pivot. EV penetration has already crossed 7.8 per cent of total vehicle sales in FY?2024–25, and with sustained policy support and infrastructure expansion, it is expected to nearly double by 2027, driving unprecedented demand for localised battery packs, traction motors, and high-voltage control units. This surge will not only test manufacturing capacity but also the depth of India’s technology stack.

At the same time, software-defined vehicles are emerging as the new battleground. Embedded intelligence, seamless connectivity, and over-the-air updates will redefine OEM strategies, making software capability as critical as mechanical engineering. In parallel, sustainability has moved from being a differentiator to becoming a mandate. Global OEMs are embedding carbon-neutral targets into sourcing frameworks, and India’s suppliers are responding with AI-powered smart factories, renewable energy integration, and circular material practices that align with ESG norms.

Conclusion
India has already shown it can do manufacturing at scale. The question before us in 2026 is bolder: Can we control the architecture and the raw material flow, competing on technology—not just cost? If OEMs lock in platform partnerships, suppliers double down on software and system integration, and policy closes the loop on upstream inputs, Atmanirbhar Bharat will not merely be a chapter in India’s auto story—it will be the title.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the publication.

Ravi Mehra

Guest AuthorThe author is the Managing Director of Uno Minda