In India’s car labs, Chinese models are the new benchmark.
The Indian automotive industry is undergoing a significant shift in its approach to vehicle development and innovation. Walk into the vehicle development centre of any major Indian carmaker and you'll find dozens of rival cars stripped to their bones, engineers poring over every exposed circuit, nut and wire. Increasingly, these models under the microscope are Chinese, signaling a notable change in the competitive landscape.
A Shift in Benchmarking
Indian carmakers are now using Chinese models as benchmarks, particularly in the rapidly growing electric vehicle (EV) segment. Models like the Xiaomi SU7, BYD Seal, Nio ET, and Zeekr 7X are now dominating teardown bays. This shift highlights the increasing recognition of Chinese automakers' prowess in EV technology, user experience, and affordable luxury features.
China's EV Dominance
China's automotive industry, bolstered by substantial state support, has made rapid advancements in EV technology, positioning itself as a leading exporter of EVs and related components. This has led to a growing presence of Chinese automakers in the Indian market, with companies like SAIC Motor, BYD Auto, and Great Wall Motors already establishing a foothold through joint ventures and partnerships with Indian firms. For example, JSW MG Motor India, a joint venture between SAIC and the JSW Group, plans to invest significantly in boosting production capacity and launching new vehicles, aiming to sell one million EVs in India by 2030.
Impact on Indian Manufacturers
The increasing presence of Chinese automakers poses challenges for domestic manufacturers and firms involved in the EV value chain. Concerns are rising about the potential dependence on Chinese imports for auto components, which could impact the competitiveness of Indian manufacturers. Some experts suggest that the Indian government and industry stakeholders need to carefully manage the risks associated with over-reliance on foreign manufacturers and potential trade imbalances.
Addressing the Challenges
To mitigate these risks, experts advocate for boosting local manufacturing and fostering homegrown innovation to achieve self-reliance. This includes investing in domestic talent, encouraging innovation, and building a robust supply chain. Strategic collaborations with global leaders, including Chinese companies, are also seen as essential for accessing advanced technologies and fostering innovation.
The Road Ahead
The Indian automotive industry is projected to experience steady growth in the coming years. The passenger vehicle sales in India were 4.1 million units in 2023 and are expected to reach 6.0 million units in 2030, registering a CAGR of 5.6% between 2024 and 2030. Electric vehicles are expected to play a significant role in this growth, with the Indian government aiming to become a global leader in both the two-wheeler and four-wheeler markets through initiatives like the Automotive Mission Plan 2026 and the production-linked incentive (PLI) scheme. In the fiscal year 2025-26, electric car sales have already surpassed previous figures, with 119,332 units registered between April and October 2025.
The rise of Chinese models as the new benchmark in Indian car labs reflects the evolving dynamics of the global automotive industry. While challenges remain, the Indian automotive industry has the potential to leverage its strengths, foster innovation, and strategically collaborate to secure its position in the global market.
