Consumption of Indian Semiconductor Components to Climb to $300-Billion Cumulative Revenue During 2021-2026

  • Mobile and wearables, IT and industrial segments currently contribute around 80% of the semiconductor revenues in India.
  • ‘Make in India’ and Production Linked Incentive schemes will boost local sourcing of semi-components in the coming years.
  • Further policy reforms and building of a semiconductor ecosystem will reduce reliance on imports going forward.

New Delhi, Seoul, San Diego, Buenos Aires, London, Hong Kong, Beijing – August 16, 2022

India’s semiconductor component market will see its cumulative revenues climb to $300 billion during 2021-2026, according to the ‘India Semiconductor Market Report, 2019-2026’, a joint research by the India Electronics & Semiconductor Association (IESA) and Counterpoint Research. IESA is the premier industry body representing the ESDM and intelligent electronics industry in India. It acts as a trusted knowledge partner to the central and state governments, helping devise policies and incentives for the industry to attract investments into India. The comprehensive research on India’s semiconductor market focuses on the bottom-up modelling unit as well as revenue demand for semiconductor components covering the entire Bill of Materials (BoM) of multiple end-device and equipment categories across seven major sectors in India – Mobile and Wearables, Information Technology, Automotive, Industrial, Telecom, Aerospace and Defence, and Consumer Electronics – from domestic consumption as well as export perspective. The report provides detailed recommendations, potential policies and a framework for building a robust domestic semiconductor ecosystem to boost local production and sourcing.

India Semiconductor Market Dashboard, 2021-2026
Source: India Semiconductor Market Report


IESA CEO and President Krishna Moorthy said, “Before the end of this decade, there will be nothing that will not be touched by electronics and the ubiquitous ‘chip’. Be it fighting carbon emissions, renewable energy, food safety, or healthcare, the semiconductor chip will be all-pervasive. Imagine this – all children all over India get educated in virtual classrooms by the country’s best teachers. The chip makes it possible. Again, imagine everyone in the country gets quality healthcare and diagnostics done remotely. Medicines are delivered by drones at your doorstep, even in the farthest villages of India. The chip will make it possible, and we will see this in front of our eyes very soon. Let us make India the semiconductor nation.”


India is poised to be the second largest market in the world from the perspective of scale and growing demand for semiconductor components across several industries and applications. This demand is being pushed by the increasing pace of digital transformation among the country’s consumers, enterprises and public sector through the adoption of new technologies, from advanced connectivity to content consumption to the cloud. These cover smartphones, PCs, wearables, cloud data centers, Industry 4.0 applications, IoT, smart mobility, and advanced telecom and public utility infrastructure.


Mobile and wearables, IT and industrial sectors alone contributed to almost 80% of the semiconductor revenues in India in 2021. Commenting on the mobile and wearables industry, Research Director at Counterpoint Research Tarun Pathak said, “The mobile and wearables sector was the biggest contributor to India’s semiconductor industry in 2021. Mobile devices have become a primary tool for internet connectivity given that broadband and laptop/PC penetration remains low. In the last five years, the ‘consumer digital transformation’ has accelerated with the availability of cheap mobile internet, and mobile devices have connected a big part of the Indian population. Also, the gradual shift from feature phones to smartphones has been generating increased proportions of advanced logic processors, memory, integrated controllers, sensors and other components. This will continue to drive the value of the semiconductor content in smartphones, which is still an under-penetrated segment in India, aided by the rise of wearables such as smartwatch and TWS.”






Commenting on the potential opportunity in the mid-to-long term, Counterpoint Research Vice President Neil Shah said, “The next big boom for semiconductor components will come from across sectors. However, the telecom sector with the advent of 5G and fiber network rollout will be a key catalyst in boosting the semiconductor components consumption. This consumption will not only come from the advanced semiconductor-heavy 5G and FTTH network infrastructure equipment, which will contribute to more than 14% of the total semiconductor consumption in 2026, but also from the highly capable AI-driven 5G endpoints, from smartphones, tablets, PCs, connected cars, industrial robotics to private networks. Also, ongoing efforts to embrace cleaner and greener vehicles (electric vehicles) will provide an impetus for the automobile industry to adopt advanced technologies, which in turn will boost the demand for semiconductor components in India. Consumer electronics, industrial, and mobile and wearables will be the other key industries for the growth of the semiconductor market in India. Further, this semiconductor demand will not only be driven by domestic consumption but also by the growing share of exports.”

In 2021, India’s end equipment market stood at $119 billion in terms of revenue. It is expected to grow at a CAGR of 19% from 2021 to 2026. The Electronic System Design and Manufacturing (ESDM) sector in India will play a major role in the country’s overall growth, from sourcing components to design manufacturing. The semiconductor industry in India is on a path to immense growth over the next few years to help India’s economy reach the next stage for both domestic consumption and exports. While the country is becoming one of the largest consumers of electronic and semiconductor components, most components are imported, offering limited economic opportunities for the country. Currently, only 9% of this semiconductor requirement is met locally.

The demand for semiconductors is growing astronomically worldwide. However, multiple factors, including the pandemic and global geopolitical events, have heavily impacted the manufacturing of the components. This research is aimed at analyzing the market situation, manufacturing supply chain, and prospects for India as a premier manufacturing destination not only for finished goods but also for semiconductor components. While the local production is currently low, India has immense potential to become a leading semiconductor component supplier in the coming years, provided the talent pool and resources are utilized correctly. The government’s initiatives, from ‘Make in India’ to Production Linked Incentive (PLI), will help accelerate this journey but will need some additional reforms to increase local manufacturing and sourcing of semiconductor components. If this is done, the semiconductor market can be a major contributor to economic growth, and India’s push to become a $5-trillion economy.


IESA Vice President Sunil G Acharya said, “Semiconductors will be inside everything intelligent. India is becoming a tech-centered growth story with advancing technologies and innovation being integral to democratizing access. The semiconductor study will play a major role in India’s growth. A large young population combined with an increased focus on digitalization, advancing skill levels, growing manufacturing and foreign investment traction will take India’s semiconductor industry to the next level in the coming years.”



Commenting on the current stage of local manufacturing, Research Analyst at Counterpoint Research Shivani Parashar said, “To achieve India’s semiconductor vision, a robust and indigenous technology ecosystem will be required to build on the existing policy foundation through PLI-like schemes. Renewed focus is needed for incentivizing the country’s design ecosystem in a manner that helps create a stronger foundation for design-led manufacturing and allied sectors, be it for local consumption or exports. This strategy will transform the landscape in the coming years to drive local sourcing trends. The share of local sourcing is expected to grow to over 17% by 2026. This translates into a six-fold rise in potential locally-sourced semiconductor revenues.”

IESA Vice President (Public Policy, Government and Corporate Relations) Anurag Awasthi said, “From safety razors to space shuttles, everything will be powered by the chip. Let us ensure our chips are not down in the world of tomorrow! Keeping this as an aim, MeitY is working further towards making India one of the next technology powerhouses, especially in a pandemic-struck world where there has been a realization of the need for more flexible and diverse supply chain ecosystems. The government is keen to leverage India’s existing strengths in mobile manufacturing, software and start-up hubs for other critical industries in the ESDM sector.”


Research Analyst at Counterpoint Research Priya Joseph added, “Government policies including PLI, New Electronics Policy, 2019, Electronics Manufacturing Clusters, and Scheme for Promotion of manufacturing of Electronic Components and Semiconductors (SPECS) are all being equipped to boost domestic design, manufacturing and assembly. To help drive more initiatives under the themes of Make in India and Digital India, the government, in its last budget, pushed the total allocation to $936.2 million. This step not only aims to incentivize India-based manufacturing but also catalyze investments in the sector to support job creation, ease of doing business, import reduction and export promotion.”

To access the full report, please contact IESA at the coordinates below.

Vine Sophia Email:

Feel free to contact us at press(at) for questions regarding semiconductor research and insights.


Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media, and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects, and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Shivani Parashar


Neil Shah

Tarun Pathak

Priya Joseph


Counterpoint Research


Related Reports:

India Automotive Industry: Struggling in 2020?

Demand for new cars declined sharply in 2019, forcing automakers to cut production across the year. Sales were expected to revive during the annual festive season from October 2019 but failed to do so. In fact, there was an encouraging spike in sales in Q3 – stimulated by promotional offers, aggressive discounts, new model launches, and the increasing availability of models offering Bharat Stage-VI (BS-VI) emission standard. However, volumes dipped soon after the season was over. Counterpoint Research expects the negative month-on-month sales trend will continue in Q1 2020. Despite continued difficulties, we expect the overall YoY decline to moderate over the rest of the year, with anticipation of economic interventions and industry stability.

Exhibit 1: Vehicle Sales in India (‘000 Units), H2 2018 vs H2 2019

Counterpoint India Auto Sales 2019 vs 2018


Political, economic and consumer-led factors will carryover from 2019 to impact sales in 2020. These include stringent environmental and safety regulations, a moderating economy, the increasing popularity of shared mobility, political uncertainty, increasing insurance norms and cautious lending.

Elaborating on these factors:

Stringent Environmental and Safety Regulations:

  • Over 2019, automotive OEMs scrambled to comply with additional mandated safety equipment requirements including anti-lock/combined braking systems, driver side airbag, speed warning alarm, rear parking sensors, front seatbelt reminders, and crash test standards. All adding to investment costs and increased pricing to customers across all models.
  • The impact of mandates introduced in 2018, e.g. five-year third-party insurance premium for two-wheelers to be collected in advance, had its full-year effect in 2019 on overall vehicle sales, and on two-wheeler sales in particular. These continue to bite.
  • By April 2020, all vehicle types, two- and three-wheelers, cars and commercial vehicles – are mandated to conform to BS-VI emission standards, with cost increases estimated to be between 5-10%. Having increased prices already at the beginning of January 2020 by 2-3% to offset economic cost increases, OEMs are faced with the dilemma of potentially absorbing some of the extra costs or lost volumes.

Moderating Economic Growth:

  • The global economic slowdown has impacted the Indian automotive sector (and Europe and China). India’s GDP growth in Q3 2019 fell to 4.5% from 5% in Q2, and from 7.1% a year ago, resulting from lowered consumer spending and reduced private investment. A depressed rural economy with the lower annual rainfall continues to have a significant impact on two-wheeler demand.
  • Growing unemployment and a moderating economy led people to postpone vehicle buying decisions. According to the Centre for Monitoring Indian Economy (CMIE), the unemployment rate was at 8.5% in October 2019, the highest since August 2016. Inflation rose to 3.99% in September 2019 from 3.18% in June.
  • The International Monetary Fund has cut its growth forecast for the Indian economy from 7% to 6.1% in 2020.

Growing Popularity of Shared Mobility:

Shared mobility providers continue to dent the demand for passenger vehicles in urban areas, with people increasingly preferring shared-mobility services for their commute. Based on primary research conducted in the country in 2019, Counterpoint Research estimates two out of three frequent users of shared mobility services consider ride-hailing more economical than owning a car. Leading players Ola and Uber have plans to expand services further into tier-2 and tier-3 cities in the next few years.

Cautious Lending by NBFCs:

Non-banking financial companies (NBFCs) finance most vehicle purchases, particularly in rural India. Dealers depend on NBFCs to fund their wholesale purchasing of vehicles from OEMs. The recent solvency issues surrounding India’s NBFCs led to cautious lending that has adversely affected automotive sales in 2019 and shows no signs of abating. OEMs and dealers have approached India’s Finance Industry Development Council, seeking government intervention to improve the financial health of leading NBFCs.

Exhibit 2: Indian Automotive Industry – Impact of Key Factors

Reasons for slowdown in India auto Industry

Growing Competition:

In spite of the apparent slowdown, MG Motors (part of SAIC Group), BYD and other leading Chinese OEMs including Changan Automobile and Great Wall Motors have serious investment plans for India and are showcasing their proposed models at this year’s Delhi Auto show. Bucking the trend MG Motors and Korean automaker Kia Motors have had strong launches of their recent SUV models, receiving significant orders months in advance. With the increased competition in passenger cars in 2020, Counterpoint estimates these new automakers will nibble away at Maruti Suzuki’s and Tata Motors’ market shares.

Exhibit 3 –  Two-Wheelers and Passenger Vehicles Sales, India, 2018-2021

India auto sales


Overall for 2020, Counterpoint Research’s automotive sales forecast for India remains cautious, with several factors – particularly tight credit conditions, the moderating economy and the transition to BS-VI emissions standards – creating uncertainty, obstacles and delays.


Post Event Coverage: EVConIndia

Counterpoint’s Consulting Director, Vinay Piparsania, was a panellist this week on “4 Wheelers-Paving the Road” at EVConIndia, organised by The Blue Circle at Gurgaon, bringing together auto and mobility Industry leaders, investors, start-ups, Government officials and policy stakeholders to discuss the possibilities and future developments for hybridization and full electrification of automobiles.

Following is a summary of different topics which were discussed on mapping the Indian terrain for the adoption of EVs:

  • Discussions and presentations at EVConIndia were focused on how India’s electric vehicle (EV) industry is recreating itself, as per government policies and current market dynamics.
  • The push for EVs is getting more urgent, with the government taking steps to encourage the growth of the EV sector.
  • Unlike the US, Norway or China, India is behind on creating the infrastructure of charging stations for EVs. An urgency can now be felt, with EV charging points coming up in cities like Bengaluru and New Delhi.
  • Potential EV operators and charging infrastructure providers are experiencing challenges associated with a lack of charging and battery swapping infrastructure, due to limited public land availability, long timelines for power connections, and lack of industry standards.
  • Creating a favorable, simple regulatory EV landscape, with appropriate guidance and incentives for ownership and operation, can build confidence amongst OEMs, auto part manufacturers, technology companies and investors to invest in the required infrastructure and technology for electric vehicles.
  • The Ministry of Power’s guidelines suggests all charging stations in India should use three charging standards: the Indian Bharat, the European Combined Charging System (CCS), and the Japanese.
  • Bureau of Energy Efficiency (BEE) is the nominated central nodal agency to facilitate the installation of charging infrastructure in the country.
  • Charging can be done at home using home-chargers (referred to as private-chargers) or public chargers, that can be installed on streets, parking lots, petrol pumps, or any other public charging spaces.
  • Charging infrastructure can be rolled out on a city-by-city basis, with select cities and regions leading the transition.
  • A smaller battery, will lower costs by reducing the total weight of the vehicle, resulting in higher energy-efficiency and improved ability to upgrade as technology evolves.
  • Personal vehicle options for EVs will, however, require further development, assurances, and accessibility to a reliable infrastructure and broader ecosystem.
  • New business opportunities will also emerge. For example, in the case of charging infrastructure setups shopping/business centres as well as in industrial/institutional facilities and hospitals, much like existing fuel stations.
  • These charging setups could be established either by OEMs, parking lot owners, solar energy enterprises, estate owners, fleet owners and even closed user groups.
  • As a way forward, there are broadly 3 parts to an EV- the battery, the electronics and electrical systems, and the rest of the vehicles. India has significant manufacturing expertise, supply chain, and capacity or the rest of the vehicle. Batteries remain a critical challenge, with India lacking the required resources and supply chain. There is quite some room for innovation and scaling on electricals and electronics.
  • Financing of EVs is a major bottleneck, with their depreciation and residual values not well established, like they are for conventional vehicles.
  • However, long term outlook for electrification of mobility and increased investment in the industry has reinforced PE, VC confidence.

Overall, EVs are the way of the future and the transformation is expected to drive newer business models, mobility experiences and savings for every industry stakeholder in the country.

Transforming Two Wheeler Rides with Connected Technology

As the automotive industry veers towards digitalization, vehicle telematics solutions are transforming connected two-wheelers (2W) from concept to reality. While modern commercial and passenger vehicles are already integrated with mainstream telematics and driver assistance features, the current wave of digital connectivity is now rapidly progressing into the 2W category as well.

Why the Push for Digital Innovations in the 2W Category?

Two critical and specific user factors for 2W owners have been primary drivers so far:

  1. Prevention of road accidents
  • Based on statistics from around the world, road accidents involving 2W have been on a steady rise in recent years
  • Detailed analysis of such 2W accidents have identified driver distraction, failure of perception and control, and over speeding as the three main causes for such incidents
  • Increasing safety regulations and innovative technological solutions are urgently being developed to avoid such instances, and to ensure the safety of riders and other road users
  1. Vulnerability to theft
  • Stolen 2W incidents too have seen a steady increase
  • Lack of  a reliable solution for tracking stolen 2Ws, and not having a real-time alert system  of a theft attempt to the owner, are attributed as possible causes for an increase in such criminal incidents

The Connected Motorcycle Consortium

In 2016, BMW Motorrad, Honda, and Yamaha together founded the Connected Motorcycle Consortium (CMC). Followed soon after, by Kawasaki, KTM, and Suzuki, the primary mission of CMC is to establish the basis for innovating on technology that integrates motorcycles in a cooperative, intelligent transport system (C-ITS), ensuring safety on-road through connectivity and networked communications between them.

The consortium’s objective is to establish a harmonized standard for motorcycle connectivity systems so that motorcycles can communicate with other vehicles on the road, to provide safety alerts and collision avoidance. CMC conducts tests on how connectivity and networked communications can be at the core of a new generation of safer and smarter bikes.

Tests have revealed that connected systems developed for cars and trucks are mostly incompatible with 2Ws, mainly because of their particular dynamic properties. For members of the CMC, integration to such networked automotive safety system necessitates the development of Vehicle-to-Vehicle (V2V) technology that will be compatible not only across all 2W OEMs but also across all types of vehicles.

Exhibit 1: Examples of Key Connected Features in Two Wheelers – Ather S340

A Need for New Collaborations

The need for digitally connected 2Ws offers collaboration opportunities among automotive manufacturers, suppliers, technology companies, telecom operators, insurance firms, government policymakers, and transport operators. Altogether, these stakeholders need to ensure a superior 2W riding experience, with enhanced safety offered through technological advancements.

Leading global automotive suppliers and telecom service providers, like Bosch and Vodafone, have already developed future-ready solutions for automotive connected features, partnering with other technology companies, to enable mobile connectivity for this next-generation 2Ws.

Exhibit 2:  Key Features in Connected Two Wheelers by BOSCH and Vodafone

Introducing Connected 2Ws in India

So, how are vehicle telematics and digitalization changing the ride experience in India, the world’s largest 2W market, where affordability is critical?

With the rapid pace of innovation happening in the country’s 2W industry, the mainstream embedding of vehicle telematics is increasing, and the impact is palpable.  Riding is no longer just two wheels and an engine,  staying connected on-the-go is also becoming popular. Be it turn-by-turn navigation, or to control music, having a smarter riding experience is now a key consideration that 2W riders want. Exhibit 3 shows the most affordable 2Ws available in India, offered with connectivity features.

Exhibit 3:  Affordable Two Wheelers in India, offering Connectivity Features


With 2W manufacturers introducing their next generation of intelligent motorbikes and scooters with integrated telematics and smart-assistance capabilities, expect digital applications and features to become mainstream soon around the world. It will eventually evolve the 2W driving experience, make it safer, and take it to a whole new level.

Associated Reports Available on Research Portal

Indian Automotive Electronics Market to Triple by 2025

The report covers passenger cars, two-wheelers, three-wheelers, and commercial vehicles sales in India from leading automakers, with a focus on automotive electronics sales forecast.

Vehicle sales in India are demonstrating on a downward in 2019, affected by factors including moderating economy and liquidity crisis of Non-Banking Financial Companies (NBFC). The market, however,  is expected to gradually recover during the forecast period, registering a CAGR of 5.1%.

Automotive electronics sales are projected to triple during the period, driven primarily by rising income levels and the growing customer preference for in-vehicle digital experience.

Indian Two-Wheeler Electronics Market to Triple by 2025

The report covers two-wheeler sales from leading automakers like Hero MotoCorp and Honda Motorcycle and Scooter India, including electronics (telematics, others) sales forecast.

Yet Another Set of Automotive Regulations to Comply in India

Every year in April, the beginning of a new fiscal year for the Indian Government as well as most Indian companies, automotive OEMs and component manufacturers in the country brace themselves for change in regulations. This year they have the added responsibility of complying with a whole new set of specific safety norms to prevent fatal and severe road accidents.

Indian roads are known to be one of the most dangerous in the world. While statistics for 2018 are still awaited, in 2017, road accidents claimed 147,913 lives and left 470,975 people severely injured. However, as per the World Health Organization (WHO), official figures capture only half of the total road fatalities. For example, in 2016, while India reported 150,785 road fatalities, WHO estimates 299,091 people lost their lives in road accidents. WHO’s figures translate to 23 out of every 100,000 people losing their lives in road accidents.

The combination of new regulations and the Global New Car Assessment Program’s (NCAP) ‘Safer Cars for India’ project is raising consumer demand for critical safety features such as airbags, and acting as an impetus for enhanced safety by Indian automakers.

Let’s have a look at the safety features that passenger car and two-wheeler consumers can expect as a standard fitment throughout FY2020: –

April 2019: Compulsory fitment of ABS/CBS for 2W and ABS for Cars.

As per latest regulations, in effect from April 2019, all new two-wheelers with an engine displacement over 125cc, are to be equipped with Anti-Lock Braking Systems (ABS), a feature that prevents wheels from locking up, even with hard braking. Smaller displacement models, with engines <=125cc, will be compulsorily fitted with a Combi-Braking System (CBS), enabling both brakes with a single lever. While the mandate was already applicable for all new two-wheelers introduced after April 1, 2018, it now extends to all existing models too in the market. In readiness to comply with these norms, most Indian two-wheeler manufacturers had already begun upgrading existing bikes with either single or dual-channel ABS. Bosch, Continental, and Endurance are key players in this race. Similarly, for all new cars launched from April 2018, fitment of ABS was compulsory. The latest mandate is now applicable for all cars on sale, including existing models, from April 2019.

July 2019: All new cars sold in India, must feature a driver-side airbag, a speed warning alarm, seatbelt reminder alarms for both driver and co-driver, and rear parking sensors as standard fitment.

As widely acknowledged, airbags, in combination with front seat belts, significantly reduce driver and front passenger injury in the event of head-on collisions. The driver-side airbag will be a mandatory fitment on all cars produced from July 2019. Along with the stronger structures required to meet new crash test norms, an airbag will drastically reduce injuries sustained in the event of a frontal collision. While the norms mandate only a driver-side airbag, dual airbags, which provide enhanced protection to the front-seat occupant as well, are presently offered as standard equipment, in mid to premium level models by most OEMs in the country.  At an average US$130-US$150 per airbag unit, Counterpoint Research estimates the mandatory fitment offers a potential business opportunity of US$350 to US$400 million annually in the country. Currently, leading vendors of airbags for passenger vehicles include Autoliv, KSS Abhishek Safety Systems, Rane TRW, and  UNO Minda-Toyoda Gosei. Denso and Bosch are both key suppliers of the airbag control units and electronic components required in these modules.

A Driver and co-driver seat-belt reminder alarm will be yet another audio warning. It will be active until both the driver and the front passenger are belted up. The three-point front seat belts, which are passive safety supports, need to be buckled for airbags to be effective.

The proposed speed warning system is mandated to beep an alert every 60 seconds when the car is running at above 80kph, and continuously sound at speeds above 120kph. The system cannot be overridden or turned off and is intended to discourage over-speeding, a root cause of most road accidents.

Also to be standard on all cars, are reverse sensors. These sensors activate when the reverse gear is engaged, providing at least an audio warning of the objects in the path of the vehicle. In some vehicles, the advanced features offer an audio-visual warning system. Parking sensors can help prevent injury to children or collision with low objects, that are not visible by the car’s side and rear-view mirrors. While most premium vehicles come equipped with reverse parking sensors or reversing cameras as part of their standard equipment, reverse sensors are limited to a select few models in the budget segments currently.

Cars with central door locking will now, by law, require a manual override switch. Also, for public transport vehicles, rear-door child locks cannot be fitted. This is an unfortunate outcome of incidents in which the feature, which allows rear-doors to be opened only from the outside, were intentionally engaged to trap passengers.

 OCTOBER 2019: Crash test norms compliance

More stringent requirements for full and offset frontal and lateral/side collision impacts have been in force on all cars launched after October 1, 2017. The latest requirements further expand the scope to all models on sale in India from October 1, 2019. As per these new crash-test standards, vehicles will undergo tests for full-frontal impact at 48KPH, offset-frontal impact with a fixed deformable barrier at 56KPH, and side impact with a mobile deformable barrier at 50KPH. As a result, most OEMs in India are having to re-engineer or phase out older models to comply with the new standards. In effect, with these new crash test compliance requirements, 2019 will be the end of the road for many older models.

With the current slowdown in automotive sales in the country and sentiments remaining subdued, it will be difficult to pass on the full cost increases of these added features to end consumers. Research on preferences of Indian customers has demonstrated a preference for added convenience/accessory features over safety equipment. Raising consumer awareness on the benefits and utility of safety features will be critical for customers appreciating such features rather than balking at their costs. Supported by active campaigns, consumers are indeed growing more conscious about the benefits of essential features of safety, such as airbags and ABS. With these safety features being applicable for future electric vehicles too, suppliers can surely look to strategically scale up to reduce their costs.

 With the safety quotient in both passenger cars and two-wheelers set to rise from these regulations, India should see safer vehicles and hopefully, far fewer fatalities than years before. A significant opportunity is available for suppliers. However, they have to ensure their capacity and resources are in place to deliver on both quantity and schedule, to realize the economic potential that the new safety regulations offer.

Analyst Contacts:

Vinay Piparsania

+91 9971005882

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