Rising costs, trade uncertainty weigh on India’s auto industry: Assocham chief

India’s automotive industry is facing mounting pressure from rising commodity prices and global trade uncertainty, even as long-term demand and the shift towards electric mobility continue to support growth prospects, Assocham president Nirmal Minda said.

He told TOI that raw material costs across plastics, aluminium and tungsten had increased sharply, putting pressure on manufacturers and suppliers alike. “The cost increase will have to be passed on at some point,” he said, adding that both original equipment manufacturers and component suppliers were grappling with higher input costs. He noted that the situation would take time to normalise, although underlying consumer demand remained healthy. Minda said India’s automobile market still had significant headroom for growth compared with global peers. He pointed to rising per capita incomes and low vehicle penetration levels as structural drivers for the industry.

He also expressed optimism about the electric vehicle transition, while cautioning that charging infrastructure remained a major bottleneck, particularly outside metros. EV adoption in the two-wheeler segment is progressing faster because home charging is easier to manage.

The Minda Group, he said, began investing in EV technologies nearly five years ago and now has capabilities across motors, motor controllers and chargers.

Minda also called for greater localisation and R&D spending to reduce India’s dependence on Chinese EV components and expensive European technologies. He urged govt to support R&D incentives for EV-related manufacturing.

On the macroeconomic front, he flagged concerns over stress in the MSME sector amid the global uncertainty.