Independence Day 2026: India’s auto industry has scale — does it have the freedom to become a global automotive powerhouse?

India’s automobile industry has travelled a long distance since Independence, evolving from an import-dependent market into one of the world’s major automotive manufacturing bases. But as India celebrates its 80th Independence Day, the industry’s next challenge is less about building scale and more about creating the conditions that allow it to compete, innovate and create wealth at a global level.

The transformation is visible in the numbers. Passenger Vehicle (PV) sales touched a record 46.43 lakh units in FY2025-26, while exports reached an all-time high of 9.05 lakh units. Government policy has simultaneously sought to deepen domestic manufacturing, with the ₹25,938-crore Production Linked Incentive (PLI)-Auto scheme aimed at developing advanced automotive technology and strengthening localisation.

The next battle is beyond manufacturing scale

Yet industry leaders believe the next phase will require more than PLI incentives. For instance, Maruti Suzuki India Chairman R.C. Bhargava has called for faster reforms by both the Centre and state governments to improve the ease of doing business, arguing that India needs to accelerate “wealth creation” to make up for the time it has lost.

In his address to shareholders in the company’s annual report for 2025-26, Bhargava called for greater use of technology to reduce corruption and administrative delays. “Use more technology as it has shown that it reduces corruption and delays. Time saving is a major factor in lowering costs of production,” he said.

Bhargava has also argued that greater trust in the private sector and stronger competition can accelerate wealth and job creation, pointing to the automobile industry as an example. He has urged political parties to set aside differences on issues concerning the larger economic interests of the country.

“Everyone’s role should be uniform and that should be for the larger interests of the economy,” Bhargava said. “If the Indian economy grows, then I definitely think a Viksit Bharat will actualize,” he added.

For Hyundai Motor India MD & CEO Tarun Garg, India’s automotive industry has already evolved into a globally competitive manufacturing and export powerhouse, backed by its supplier ecosystem, engineering talent and policy support. But the next frontier of self-reliance, he said, lies beyond manufacturing scale.

“The industry needs to build deeper capabilities in advanced electronics, batteries, semiconductors, software-defined mobility and other future technologies,” Garg said. The South Korean carmaker plans to support that transition through deeper localisation, investments in advanced manufacturing and electrification, development of software-defined vehicles and collaborations with academic institutions.

Dr. Uday Narang, Founder and Chairman of Omega Seiki Mobility, pointed to another dimension of the challenge: India’s dependence on critical technologies and raw materials.

“True independence will go beyond manufacturing scale,” Narang said, pointing to dependencies on advanced semiconductors, lithium and cobalt, high-end sensors, software and other emerging technologies. The next decade, he said, needs greater focus on domestic chip manufacturing, secure battery-material supply chains, indigenous R&D and green technologies.

According to Federation of Automobile Dealers Association (FADA) CEO Saharsh Damani, India had “unquestionably achieved manufacturing scale”, but technological and supply-chain sovereignty remained “an unfinished agenda”.

“Self-reliance should not mean manufacturing everything within India, given the inherently global nature of modern automotive supply chains. Instead, India needs to ensure that no single external choke point can stop Indian production, with dependencies still existing in areas such as advanced battery cells and materials, rare-earth permanent magnets, semiconductors, displays and sophisticated electronics,” Damani said.

From domestic strength to global competitiveness

For Mercedes-Benz India MD & CEO Santosh Iyer, India’s opportunity increasingly lies in connecting its domestic manufacturing strengths with global supply chains.

“The Indian automotive industry has all the right ingredients to compete globally and create its own mark as a potential global manufacturing hub,” Iyer said. But the domestic market needs to become more robust and competitive on products and pricing, while being able to respond to changing global economic conditions and evolving customer requirements.

“India enjoys strong macroeconomic advantages, and we must leverage supply chain opportunities in a multipolar world,” Iyer said. Technology, he added, will be critical as mobility becomes increasingly software-defined, requiring investments in AI, semiconductors, electronics, cybersecurity and digital engineering. Stronger consumer purchasing power will also be important to sustain demand and broader economic growth.

While India may have achieved manufacturing independence, the bigger question now is whether it can achieve the technological and supply-chain depth to make “Made in India” synonymous with global automotive competitiveness.