Independence Day Feature: Is it Possible for Domestic Companies to Determine the Course of Transportation Development By the Year 2047?
India's mobility sector is navigating through a series of challenges and opportunities, as highlighted by various industry analysts and stakeholders.
According to Sharma of Nomura Research, the growth in India's mobility sector is often hindered by infrastructure and supply chain bottlenecks. Tier-2/3 cities and rural areas lack adequate roads, charging stations, and logistics hubs. Moreover, fragmented supply chains and limited local vendors for components, batteries, and electronics lead to quality issues, delays, and higher costs.
Soumen Mandal, Senior Analyst at Counterpoint Research, has identified several risks to the execution of India's mobility ambitions. These include slow localisation of cells, materials, power semis, fragmented certification and safety standards, urban grid and land constraints for fast charging, scaling functional safety and cybersecurity talent, capital intensity versus payback in hardware, and rising data and cybersecurity compliance as vehicles become software-defined.
Despite these challenges, there are signs of progress. The Indian government has unveiled the Automotive Mission Plan 2047 to position India as a global automotive powerhouse. This ambitious plan includes programs like Digital India, Gati Shakti, Startup India, and FAME II to develop advanced regulatory frameworks for clean, connected, and autonomous mobility.
One company making strides in the battery sector is Amara Raja Energy & Mobility. They are developing customisable Battery Management Systems (BMS) and smart battery technologies optimised for local conditions, which can empower homegrown startups and automakers. Amara Raja is also evaluating opportunities for collaboration for next-gen technologies on a case-to-case basis.
India's auto component exports already exceed imports, according to Nomura Research, with localisation of batteries, motors, and electronics allowing for a cost and innovation edge, supported by Production Linked Incentive (PLI) schemes.
The success of India's overall mobility market will eventually depend on how quickly the ecosystem can overcome these execution challenges. India has the potential to be a global mobility hub by exporting cost-optimised subsystems, ADAS/IVI, voice/AI tuned for complex traffic and languages, fleet electrification, smart logistics stacks, and battery second-life solutions suited to hot and price-sensitive markets.
In the realm of urban air mobility, Garuda Aerospace is collaborating with regulatory bodies like the Directorate General of Civil Aviation (DGCA) and the Ministry of Civil Aviation to shape the future of this sector. Garuda is also establishing India's first "Drone City" in Andhra Pradesh, a hub for drone innovation, research, and development.
The rare earth magnets crisis is another challenge facing the Indian automobile industry. E-waste recycling and lithium-ion battery recycling startup Attero estimates that India's demand for rare earth magnets is roughly around $10 billion every year. Attero's current capacity for rare earth material extraction is roughly one tonne per day, which is being expanded to 100 tonnes per day in the next 12-24 months, meeting about 50 per cent of India's need for rare earth magnet requirements.
Investment and innovation are focusing on next-era mobility like EVs, battery tech, urban air mobility (eVTOL), AI-powered logistics, MaaS (Mobility as a Service), and shared mobility platforms, as stated by Nomura Research Institute.
Lastly, Garuda Aerospace, a homegrown Indian startup, is working towards full indigenisation of drone supply and production to make them affordable. Based on estimates compiled by Attero, the global rare earth elements (REE) sector is likely to grow to $10.9 billion by 2029, expanding at a CAGR of 12.6 per cent, with the market for REE magnets forecast to surpass $30.3 billion by 2033. However, the lack of some critical raw materials poses supply chain resilience risks and unpredictable higher costs, as noted by Sharma.
In conclusion, India's mobility sector is facing a myriad of challenges, but there is a strong drive towards innovation and localisation. The success of the sector will depend on how quickly these challenges can be overcome, and the potential rewards for a thriving mobility sector in India are significant.
