BRICS (Brazil, Russia, India, China, and South Africa) nations are not just influential due to their large populations and growing economies, but they have also been pivotal in reforming global institutions and driving economic policies that challenge Western hegemony.
Updated on 22 Sep 2024, 12:27 PM
BRICS nation;
BRICS and India’s Automotive Future
As BRICS expands to include new members like Saudi Arabia, Iran, and Argentina, its influence is set to grow even further.
India, as one of the fastest-growing economies in BRICS, plays a crucial role in shaping the bloc’s future. Among the many sectors where India holds prominence is the automotive industry.
India’s automotive sector is one of the largest in the world, and it’s positioned at the intersection of global trends such as electric vehicle (EV) adoption, technological innovation, and supply chain realignment.
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The BRICS expansion presents new opportunities for India to enhance its automotive trade, tap into emerging markets, and drive innovations that can lead to greater collaboration among member nations.
Growth of the Indian Automotive Market within BRICS
India’s automotive industry is a key player within the BRICS bloc, particularly in terms of production, exports, and innovation.
It is poised to grow significantly, with projections indicating that the Indian automotive sector will reach a valuation of $300 billion by 2026
One of the reasons for this rapid growth is the strong domestic demand for vehicles, coupled with India’s manufacturing capabilities, which have attracted investment from global auto giants like Hyundai, Toyota, and Tesla.
The Indian government has also played an instrumental role, introducing policies to incentivize domestic production and attract foreign direct investment (FDI) in the automotive space.
India’s role within BRICS is crucial because of its strategic position in both the traditional automotive sector and the emerging electric vehicle (EV) market.
Trade agreements among BRICS nations have allowed Indian manufacturers to export vehicles and components to other member countries, benefiting from reduced tariffs and streamlined regulatory requirements.
As the BRICS bloc expands to include more countries, Indian automakers can further capitalize on these trade agreements to penetrate new markets in Africa, the Middle East, and Latin America.
Moreover, India’s automotive production numbers continue to rise. In 2021, the country produced more than 3.5 million vehicles, making it the fifth-largest car manufacturer globally. Exports have also been growing, with Indian automakers shipping vehicles to over 120 countries
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Electric Vehicles in BRICS Countries: A Comparative Analysis
The transition to electric vehicles is a global trend, but it is particularly significant for BRICS nations. Among the BRICS countries, China leads the world in electric vehicle production, accounting for around 60% of global EV sales
However, India is quickly gaining ground, thanks to favorable government policies and increasing consumer demand for cleaner, more sustainable transport options.
The Indian government has introduced the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme, which incentivizes EV production and aims to make EVs 30% of all vehicle sales by 2030.
Through subsidies, tax rebates, and investments in charging infrastructure, the government is pushing for faster adoption of electric mobility. India’s commitment to decarbonizing its transportation sector aligns with broader BRICS objectives of reducing carbon emissions.
While India is still behind China in terms of total EV sales, the country’s competitive advantage lies in its robust IT infrastructure and technological capabilities, which can accelerate EV innovation.
For instance, India’s prowess in software development has positioned it to lead in the integration of connected car technologies and autonomous driving systems, areas where BRICS countries can collaborate to share knowledge and resource.
Other BRICS nations, such as Russia and Brazil, are also taking steps to adopt EVs, though at a slower pace compared to India and China.
Collaboration among BRICS members in electric vehicle technology, manufacturing, and policy development can further accelerate EV adoption across the bloc.
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BRICS Automotive Supply Chain and India’s Role
Supply chain disruptions due to the COVID-19 pandemic have exposed vulnerabilities in the automotive sector, particularly in sourcing critical components like semiconductors.
BRICS collaboration can help mitigate these challenges by fostering intra-bloc trade and technology sharing.
India’s automotive supply chain is deeply intertwined with global markets, especially in areas like vehicle components and EV batteries.
The country is emerging as a hub for automotive parts manufacturing, exporting to both BRICS and non-BRICS countries.
India’s trade partnerships with other BRICS nations, particularly in automotive components, allow for reduced tariffs and easier market access, creating a more resilient supply chain
The BRICS expansion can also enhance technology transfer and investment in critical areas such as EV battery production.
India’s goal to become a global leader in EV manufacturing requires access to advanced battery technologies, which can be facilitated through partnerships with China and Russia, both of which have made significant strides in this area
India is also looking to capitalize on the growing demand for EVs within the BRICS bloc by becoming a major exporter of electric vehicles and components.
Partnerships with other BRICS members can help India secure the raw materials needed for EV production, such as lithium, which is essential for battery manufacturing.
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As BRICS expands, trade routes and agreements between member countries can be strengthened, making it easier for India to source these critical materials.
Electric Vehicle Sales Growth in BRICS Nations
In 2022, China accounted for approximately 60% of global EV sales, thanks to aggressive government policies, substantial investments in infrastructure, and a mature domestic EV market.
Electric car charging
India is following a similar trajectory, with a significant rise in demand for EVs due to environmental concerns and government incentives
In 2023, EV sales in India surpassed 1 million units, a milestone that reflects both growing consumer awareness and improvements in EV infrastructure.
India’s focus on developing charging networks, battery swapping systems, and incentivizing domestic manufacturers has driven this surge in EV adoption
While China is ahead in terms of total EV sales, India is emerging as a key player in the global EV landscape. The country’s competitive advantage lies in its ability to produce affordable electric vehicles, which can cater to the needs of both domestic and international markets, including other BRICS nations.
Collaborating with other BRICS members on technology, research, and development will further enhance India’s standing in the EV market.
Future Prospects and Strategic Moves for India
India’s automotive future is closely tied to its participation in the BRICS bloc and its expansion. The opportunities for collaboration in electric vehicle production, technology sharing, and supply chain resilience are immense.
As BRICS expands to include new members, India’s role as a key automotive producer will only grow, providing new markets for Indian manufacturers and greater access to critical resources.
Looking forward, India can leverage its technological expertise and manufacturing capabilities to lead the BRICS bloc in automotive innovation.
The country’s push for EV adoption aligns with global sustainability goals, and collaboration within BRICS can help accelerate this transition.
By focusing on electric vehicle growth, enhancing supply chain integration, and tapping into new markets, India is well-positioned to become a global leader in the automotive sector.
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The convergence of BRICS collaboration and India’s automotive ambitions promises exciting opportunities for innovation, trade, and environmental sustainability.
