PLI Boost to Drive Auto Component Growth

Chennai: The higher allocation for Production-Linked Incentive (PLI) schemes in the Union Budget is good news for the auto component industry, according to industry experts. The sector is expected to benefit directly from this support, and it may also see additional demand from other industries because of the government’s focus on infrastructure and manufacturing.

Traditionally, auto component companies mainly supplied parts to vehicle manufacturers. However, many companies have now diversified and are supplying components to non-automotive sectors as well. These include defence, railways, clean energy equipment, construction machinery, and electronics. Because of this wider presence, new growth opportunities are opening up.

Experts said the Budget’s strong focus on infrastructure development, clean energy transition, and boosting domestic manufacturing will create more demand for components and engineering products. Large projects such as roads, railways, renewable energy plants, and industrial facilities will require machinery and equipment, which in turn will increase the need for parts and components.

Industry representatives believe that government support through PLI schemes will encourage companies to expand production, invest in new technology, and improve quality. This will help Indian manufacturers become more competitive in both domestic and global markets.

They also pointed out that diversification will reduce the sector’s dependence on automobile sales alone. Even if vehicle demand slows down, growth in other sectors can support steady business for component makers.

Overall, the auto component industry sees the Budget as positive and growth-oriented. With policy support and rising demand from multiple sectors, companies expect better orders, more investments, and stronger long-term growth.