India’s automotive sector is evolving as a global force, driven by the principles of Aatmanirbhar Bharat, a government initiative promoting self-reliance across industries. In light of global disruptions, technological advancements, and growing cybersecurity risks, the nation is transitioning from being just a cost-effective manufacturing hub to an innovator within the global supply chain. This article explores the deeper implications of this shift, especially amid supply chain challenges and the adoption of emerging technologies in the automotive sector.
In the automotive industry, supply chains rely on numerous manufacturers globally, contributing tens of thousands of parts per vehicle. Traditionally structured into tiered systems, OEMs now face increased integration challenges with high-tech components like sensors, software, and AI. To meet demands for CASE (connected, autonomous, shared, and electric) vehicles, Indian automakers are partnering directly with tech companies to streamline innovation, integration, and testing. This shift helps accelerate progress, aligning operations more closely with technology providers and advancing towards a high-tech automotive future.
Supply Chain Disruptions and Geopolitical Risks: A Test for Aatmanirbharta
The automotive supply chain, heavily reliant on global networks, has faced unprecedented disruptions in recent years. Events like the COVID-19 pandemic, the global semiconductor shortage, and geopolitical tensions such as the Russia-Ukraine conflict have brought production to a halt for many manufacturers. These disruptions exposed vulnerabilities in just-in-time (JIT) manufacturing systems, prompting automotive companies to re-evaluate their supply chains
One of the most profound crises has been the global semiconductor shortage, affecting companies worldwide, including Indian manufacturers. Mahindra & Mahindra and Tata Motors, two of India’s largest automakers, had to delay the production of critical models due to chip shortages. In response, the Indian government launched initiatives like the PLI (Production Linked Incentive) Scheme to foster the domestic production of semiconductors and other critical automotive components. With the approval of the Semicon India programme by investing ₹76,000 crore in semiconductor manufacturing, India aims to become less dependent on imports and more resilient to global supply chain risks.
Moreover, the Russia-Ukraine conflict affected the supply of critical raw materials like palladium, used in catalytic converters, and neon gas, essential for chip manufacturing. These geopolitical risks have driven Indian automakers to diversify their sourcing and strengthen local production capacities, emphasising the need for Aatmanirbharta in the supply chain.
The recent Red Sea crisis, resulting from the ongoing Israel-Hamas conflict, has compounded these supply chain vulnerabilities. Attacks on container vessels in this vital trade route have disrupted logistics, leading to delayed deliveries for luxury automotive brands like Audi. As Audi India’s Head, Balbir Singh Dhillon, noted, these disruptions are expected to affect deliveries until the first quarter of 2024, further highlighting the need for robust supply chain strategies.
Sanjay Jaju, Union Minister of Information and Broadcasting, remarked, “When we say that we want Atmanirbhar Bharat, we are not saying we are going to close our doors to the entire world but, on the contrary, we are saying this shows our openness and engagement. But it has to align with the requirement of self-reliance, especially in critical and strategic sectors,” as reported by PTI.
Emerging Technologies: A Driving Force for Aatmanirbharta
India’s automotive industry is leveraging cutting-edge technologies such as Artificial Intelligence (AI), Internet of Things (IoT), 5G, and electric mobility to strengthen its foothold in global supply chains. These technologies are not only enabling better production capabilities but also enhancing the overall consumer experience.
IoT and AI are revolutionising smart manufacturing, with automotive companies leveraging AIoT to optimise production lines, reduce downtime, and enhance efficiency.
Tata Motors’ recent initiative “Trucking Into The Future” aims to unite stakeholders in the trucking and road logistics sectors to discuss evolving needs and challenges. By promoting the adoption of advanced technologies, the initiative seeks to enhance safety, efficiency, and sustainability in supply chain logistics, aligning with both national and global goals. Central to this effort is Tata Fleet Edge, an advanced fleet management system that offers real-time data on vehicle health and performance, enabling fleet operators to optimize routes and reduce downtime for improved operational efficiency.
In the EV space, Ola Electric plans to integrate its indigenous lithium cell battery, named “Bharat cell,” into its electric vehicles by Q1 FY26, signalling a significant move towards self-reliance. Bhavish Aggarwal, the founder of Ola, described this technology as a potential game changer for the Indian market, likening it to the “5G of lithium cells.” He emphasised that this cutting-edge technology, developed in India, is unique, with only a few global companies possessing similar capabilities.
5G and C-V2X technologies are reshaping automotive supply chains by enabling real-time updates and seamless communication across vehicles, infrastructure, and logistics systems. These advancements improve data sharing, helping manufacturers quickly respond to disruptions, enhancing efficiency, and cutting costs. Partnerships like Reliance Jio’s collaboration with MG Motor India for connected car services are driving innovation. The integration of 5G into autonomous vehicles and vehicle-to-vehicle communication is making the automotive sector more adaptive, reliable, and future-ready.
EV battery production is another critical area where emerging technologies are driving India’s self-reliance. The government’s FAME II scheme promotes the adoption of electric vehicles by providing financial incentives and tax benefits, thus encouraging domestic companies to innovate in battery manufacturing. The PLI scheme further supports the development of Advanced Chemistry Cell (ACC) batteries, which are critical for the EV ecosystem.
Cybersecurity in the Automotive Supply Chain: A Growing Concern
With the increased digitization of supply chains and the rise of connected vehicles, cybersecurity has become a top priority. The automotive sector is particularly vulnerable to cyberattacks, with Seqrite Labs reporting that the industry is among the top targets for cybercrime. The interconnected nature of modern vehicles, especially electric and autonomous models, makes them susceptible to cyber threats, which can compromise vehicle safety and the integrity of the supply chain.
Indian automakers such as Maruti Suzuki, Mahindra & Mahindra, Tata Motors, and Ashok Leyland are joining hands with IOC Phinergy to explore innovative aluminium-air battery technologies to advance their electric vehicle (EV) initiatives. While the collaboration focuses primarily on energy storage solutions, these automakers are also working on implementing broader cybersecurity measures for their EV portfolios to ensure vehicle and supply chain security.
Maruti Suzuki has also partnered with Accenture to drive its digital transformation, leveraging cutting-edge technology to enhance both customer experience and operational efficiency. Through this collaboration, Maruti has digitised many touchpoints, emphasising data-driven strategies and innovation. The partnership also focuses on generative AI and digital solutions across its operations, including cybersecurity to safeguard its digital ecosystem and supply chain.
Moreover, Indian automotive companies are focusing on end-to-end encryption, blockchain technology, and cybersecurity audits to safeguard data integrity. Blockchain is particularly beneficial in supply chain management, as it provides a secure, transparent ledger for tracking goods and materials. By adopting blockchain, companies can reduce the risk of fraud, enhance traceability, and improve the overall security of their supply chains.
Digital Transformation: Mitigating Supply Chain Risks
The pandemic and subsequent global crises have accelerated the adoption of digital transformation tools in India’s automotive supply chain. Real-time visibility platforms and AI-driven analytics are now indispensable for managing disruptions and optimising production. For instance, Mahindra’s recent collaboration with Kinaxis enables it to leverage advanced supply chain software that provides real-time visibility into inventory and demand fluctuations, ensuring agility in decision-making.
“The connected Sales & Operations Planning (S&OP) implementation with Kinaxis will, by design, lead to increased transparency & collaboration across departments, augment our demand and supply forecast accuracy and facilitate comprehensive scenario modelling to drive efficiencies and agile decision-making across key cross-functional forums,” said Rucha Nanavati, Chief Digital Transformation Officer, Automotive Sector, M&M.
In the early 2010s, Bajaj Auto Ltd. recognized the need to standardise production and address the physical challenges of assembly tasks. To tackle this, they introduced over 100 Cobots into their manufacturing lines, streamlining two-wheeler assembly, achieving greater precision, and improving efficiency.
Generative AI is also anticipated to significantly transform supply chain operations. A recent survey indicates that the Gen AI market within the automotive industry is expected to grow from $335 million in 2023 to $2.6 billion by 2033, representing a compound annual growth rate (CAGR) of 23%. Gen AI is poised to revolutionise India’s automotive supply chain by enhancing demand forecasting, optimising processes, and automating decision-making. It improves inventory management, predictive maintenance, and risk mitigation while fostering collaboration among partners.
Tata Technologies, in collaboration with Microsoft and Tata Motors, launched the second edition of the InnoVent Hackathon in June 2024. This initiative focuses on engaging engineering students in India to develop innovative solutions using Generative AI in manufacturing, product engineering, and customer experience.
Predictive analytics, powered by AI, is also being adopted to forecast potential supply chain bottlenecks. This technology allows manufacturers to anticipate disruptions and implement contingency plans, significantly reducing downtime.
India’s automotive sector is also leveraging 3D printing to reduce dependency on external suppliers. Maruti Suzuki, for example, has successfully implemented 3D printing technology for producing automotive components, reducing lead times and increasing production flexibility.
Sustainability and Innovation in Material Use
Aatmanirbhar Bharat is not just about economic independence; it also prioritises sustainability. Indian automotive manufacturers are increasingly adopting sustainable materials like aluminium, magnesium, and non-ferrous metals, which reduce vehicle weight and improve fuel efficiency. These materials are eco-friendly, aligning with global standards to lower carbon emissions.
In response to the growing demand for green vehicles, companies like Mahindra and Tata Motors are exploring hydrogen fuel cell technology and investing in the production of biodegradable plastics for car interiors. These innovations are not only reducing the environmental impact of production but are also enhancing India’s competitiveness in global markets, especially as the world shifts towards greener automotive solutions.
The Road Ahead: India’s Role in Global Automotive Supply Chains
In this rapidly evolving automotive ecosystem, India stands poised to redefine its role through innovation, sustainability, and self-reliance. By embracing advanced technologies and prioritizing resilience against global disruptions, India can emerge as a leader in shaping the future of mobility. The commitment to Aatmanirbhar Bharat not only enhances national competitiveness but also positions India as a beacon of progress in the global automotive supply chain.
Yashi Mittal
Head-Corporate Communication
Future Mobility Media