The Green Accelerator: Why ESG is the New Engine for India's Auto Component Industry
India’s auto components sector is a formidable powerhouse, currently valued at over $80.2 billion and projected to hit $100 billion in exports by 2032. However, this growth narrative is now inextricably linked to one factor: Environmental, Social, and Governance (ESG) performance.
A recent GovEVA White Paper and a compelling webinar - Accelerating Sustainability in India's Auto Components Industry - brought together industry leaders to discuss this critical shift. The consensus was clear: ESG is no longer "good to do," but a strategic imperative that unlocks global competitiveness and value.
Watch the full webinar here
As Jangoo Dalal, Chief Executive Officer, GovEVA and host of the webinar, aptly concluded:
"For this industry, for this sector, ESG is here to stay, the train has left the station. It's not going back, your customers want it, your board members want it,".
The Urgency: Risk, Reward, and Regulation
The drive towards sustainability is being fueled by twin forces: global regulation and immense financial upside.
- The Regulatory Threat: Global mechanisms like the European Union's Carbon Border Adjustment Mechanism (CBAM) could impose an estimated $550 million in annual costs on the sector by 2034, making ESG compliance essential for export viability.
- The Financial Opportunity: Insights from the White Paper reveal that ESG adoption offers significant advantages, including a potential 20-30% reduction in carbon intensity and a 7-9% uplift in revenue.
This dramatic shift is felt across the industry, driving companies to reorganize and integrate sustainability into their core strategy.
Daniel Dharmaraj, Head - Corporate Sustainability, Brakes India Limited, highlighted this organizational change:
"Our function's name has been changed to Corporate Sustainability two years back, because of the growing requirements in this area. So, we need to equip ourselves in sustainability. All of us are evolving in this area,".
Redefining ESG from Cost to Investment
Historically, sustainability has been viewed as a compliance cost. Today, business leaders are reframing it as a strategic investment that generates both measurable and long-term value.
Shankaran Ranganathan, CFO at Automotive Axles, provided the financial perspective:
"We always propagate this internally. It's not a cost. The word cost towards this ESG initiative is more or less, we can say it's an investment for tomorrow.".
Collaboration is Key to Decarbonization
Successfully navigating this transition requires a collaborative effort that extends beyond the immediate organization to the entire supply chain. Achieving ambitious goals, such as tackling Scope 3 emissions (which include supplier-related activity), demands transparency and shared platforms.
Ankit Todi, Chief Sustainability Officer for the Mahindra Group, spoke about his experience transitioning from a strategic consultant to an internal practitioner:
"I think it's also, honestly, a bit more effective to be on the inside, because you have a much better visibility into what's happening, where can we do things.".
He added that collaboration must supersede competition:
"sustainability is at least not an area where we should be competing. It's an area where only by working together, we grow the size of the pie, and from a business value perspective.".
Thakur Pherwani, Chief Sustainability Officer at TVS Motors, reinforced the necessity of dialogue and proactive change:
"This is something which I consider is a need of an hour to have a dialogue. Discussion, deliberation with respect to. A change which is inevitable...".
He emphasized the role of Original Equipment Manufacturers (OEMs) in driving this forward:
"So that OEM bring in all SMEs and MSME under their gambit and take them along in this journey."
Conclusion: Your Sustainability Sherpa
The time for deliberation is over. The path forward for India's auto components sector lies in integrating ESG deeply into business operations, moving beyond mere compliance to strategic value creation.
Download the full Auto Components - Industry White Paper for detailed analysis, metrics, and value creation levers that can help your organization secure global competitiveness in a net-zero future.
Ready to Take the Next Step?
You’ve explored the strategies, now let’s put them into action. With GovEVA as your ESG Sherpa, compliance and sustainability become a clear, achievable climb.
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