Copying the iPhone Model Will Fail Auto Component Manufacturing

India has proved it can host complex manufacturing, with iPhone exports crossing $50 billion in 2025. The new policy instinct is to swing that spotlight toward auto components. If this ambition is realised, component exports could rise to about $60 billion by 2030 from roughly $23 billion today, on a total production of around $145 billion.

The temptation is obvious. If India could assemble the world’s most valuable consumer device at scale, why not crankshafts and control arms?

That assumption, however, deserves far more scrutiny than it is getting, because it shapes not just auto policy but also the risk that India will misapply a model that worked once under very specific conditions.

Here is where the analogy begins to break.

The iPhone model works because a single anchor client creates an overwhelming gravitational pull through massive, predictable order volumes. Auto components operate in a very different universe. They exist in multi-client, multi-standard environments spanning more than 50 global OEMs, each with qualification cycles stretching seven to 10 years. There is no Apple-like buyer in the auto components industry, no customer large enough to bend an entire supply chain around itself. Policy therefore has to do the slower work of building shared capabilities such as standards infrastructure, testing capacity, engineering depth, and pools of intellectual property.

That distinction matters because it explains why India’s iPhone exports are impressive but structurally fragile. If Apple decides that Vietnam offers better terms, volumes can migrate within 18 to 24 months. Vehicle components behave differently. They force an economy to build depth in precision engineering across dozens of product families. Once an Indian supplier clears certifications for German transmissions, switching costs become prohibitive. Supply chains harden.

The numbers offer a sobering check on how far India still has to go.

The global auto component market is roughly $2 trillion, with about $700 billion traded across borders. India’s share is just 3%, even though the country is the world’s fourth-largest vehicle producer. Exports of about $23 billion are nearly offset by imports, leaving the trade balance close to neutral. India also remains marginal in high-value segments such as engines and transmissions, which account for close to 60% of global trade.

Cost Disadvantages
Cost structures, for now, work against Indian suppliers in ways policy slogans tend to gloss over. Industry analysts estimate a 10% cost disadvantage relative to Chinese peers, compounded by another 20% on capital goods and about 3% arising from depreciation rules. Mexico offers an uncomfortable comparison. Labour is hardly cheaper there, yet Mexican suppliers account for an estimated 10% of global exports of transmission components. What Mexico built, and India has not, is deep integration into the engineering cycle itself. Mexico became a testing ground for new platform development. Indian suppliers remain value-tier manufacturers rather than engineering partners.

Distance is not the real hurdle. Standards are less forgiving than tariffs or freight. Indian suppliers struggle to gain traction in Europe because certifications treated as non-negotiable by OEMs remain elusive. IATF 16949 or VDA 6.3 certifications can take 18 to 36 months to secure for first-time suppliers. Without domestic validation capacity, firms ship prototypes to Germany or Japan, adding six to 12 months to development cycles. Recent NITI Aayog proposals are notable precisely because they move beyond exhortation into the mechanics of fixing this, including government-backed testing infrastructure that private labs cannot finance on their own.

Trade agreements by themselves do not solve the problem. The India-UK FTA offers duty-free access for 99% of exports, and the UK imports roughly $8 billion in auto components annually. On paper, tariff removal could shave up to 10% off landed costs. In practice, UK OEMs demand real-time quality integration and just-in-time delivery. India’s port dwell times of about 2.5 days, compared with Rotterdam’s 0.5 days, quickly erase that advantage.

Precision Engineering
The same logic applies to other sectors now competing for policy attention.

Medical devices are closer to automotive components than to smartphones. India has about $400 million in PLI support for medtech under the current scheme and ambitions to reach $20-25 billion in output by 2028. Like auto components, the sector demands precision engineering and fragmented certification regimes. There is no Apple of medtech to anchor the supply chain. Shared testing facilities and intellectual property pools could, however, move the needle.

Semiconductors operate on a different scale of risk and capital altogether. The $10 billion PLI targets terrain where India has no legacy base. Fabrication plants demand up to $20 billion each, along with dense ecosystems of gases, chemicals, and tooling. Without anchor demand, assembly alone cannot by itself justify that capital intensity.

Pharmaceuticals start from a stronger position of global trust. India already commands roughly 20% of global generic drug exports. The gaps are narrower, centred on API manufacturing, which remains dominated by China, and can be addressed through targeted fixes rather than wholesale ecosystem creation.

Auto components and medtech operate in multi-client environments where no single OEM creates the pull Apple does. Semiconductors demand capital intensity not yet available domestically, while pharmaceuticals require selective repair rather than reinvention. A breakout moment in components is not impossible, but it will emerge only if standards, scale, and skills move together rather than in silos.

Otherwise, India risks ending up with a manufacturing base that is busy but not profitable, visible but not vital to the global supply chain.