New Delhi, Sep 5: Electronics are becoming an increasingly important part of modern vehicles, and this shift could create a major growth opportunity for India’s auto-component industry over the next few years.
According to the BCG-ACMA report, electronics could account for 45-55 per cent of a vehicle’s cost by 2030, compared with around 30-35 per cent in 2020. The rise is being driven by connected features, advanced safety systems, sensors, infotainment, electric powertrains and other technology.
For India, the opportunity is significant because electrical and electronic components accounted for only about 12 per cent of domestic auto-component supply by value in FY25. This leaves considerable room for Indian suppliers to increase their presence in a rapidly expanding part of the vehicle value chain.
The report points to growing demand for products such as sensors, electronic control units, power electronics, connectivity systems, battery-management systems and advanced safety technologies. As vehicles become more software-driven, suppliers will also need stronger capabilities in electronics, software and engineering.
Safety technology is already gaining ground in India. The penetration of advanced driver-assistance systems in new passenger vehicles increased from less than 1 per cent in 2021 to around 8 per cent in 2025, adding to demand for electronic safety components.
Electrification is creating another major market. Electric vehicle registrations across categories increased from around 1.4 lakh in FY21 to about 25 lakh in FY26, increasing demand for batteries, electric motors, power electronics and thermal-management systems.
The auto-component industry itself has expanded strongly, reaching around $80 billion in FY25, and is targeting about $200 billion by 2030. Exports have also increased, with the industry aiming to significantly expand its presence in global supply chains.
However, the transition will require greater investment in technology and skills. The report highlights that many Indian suppliers still depend on external companies for product designs, while shortages of talent in electronics, software and mechatronics remain a challenge.
For Indian manufacturers, deeper localisation of automotive electronics could reduce dependence on imports while allowing domestic companies to capture a larger share of the value created by new vehicle technologies.
The shift could also support investment, skilled employment, research and development and exports. With the global automobile industry becoming increasingly electronic and technology-driven, building domestic capabilities in this area could become an important part of India’s next phase of automotive growth.