Sushant Kumar, an independent director with over 18 years of experience across the Indian manufacturing and automobile industry
New Delhi [India], February 06: India’s automobile manufacturing sector is approaching a decisive milestone. By 2026, the industry is projected to touch $300 billion in size, reinforcing its role as one of the country’s most important economic engines. The sector already contributes over 7% to India’s GDP and nearly half of total manufacturing output, spanning two-wheelers, passenger vehicles, commercial vehicles, and specialised transport equipment.
India today is the world’s largest manufacturer of two-wheelers and tractors, and the third-largest passenger vehicle market globally. However, as the industry scales, the nature of its challenges is shifting. The next phase of growth will be shaped less by capacity expansion and more by governance depth.
Sushant Kumar, an independent director with over 18 years of experience across the Indian manufacturing and automobile industry, explains, “The industry is no longer grappling with basic execution issues. It is navigating complexity, technology shifts, compliance exposure, and global integration. Boards are expected to understand engineering risk, not just financial outcomes.”
Having worked across product development, R&D, and cross-border manufacturing collaborations, Kumar notes that “Technically informed boards are better positioned to ask the right questions before risks materialise,” he adds.
What’s Driving the $300 Billion Momentum
The industry’s current trajectory rests on several structural drivers. Rising income levels and urbanisation continue to support domestic vehicle demand. Large public infrastructure projects have boosted the commercial vehicle and heavy transport segments. At the same time, export volumes have reached record highs, with Indian manufacturers increasingly supplying global markets.
Policy initiatives such as the Automotive Mission Plan 2026, Production Linked Incentive (PLI) schemes, PM E-Drive, and other targeted support for electric mobility have accelerated investment across vehicle and component manufacturing. These measures have also encouraged localisation, helping India reduce import dependence while strengthening supplier ecosystems.
Yet, growth at this scale brings new vulnerabilities.
The Boardroom Challenges:
As manufacturing ecosystems expand, boards are being pushed beyond traditional supervisory roles:
- Technology & Digital Transformation Oversight: Boards must now guide the adoption of advanced technologies such as Industrial Internet of Things (IIoT), digital twins, and AI.
- From monitoring output to managing complexity: Volume growth now comes with regulatory, technological, and reputational risks
- Faster decision cycles: Rising global volatility from geopolitics to policy shifts demands timely, well-informed board intervention.
- Risk anticipation over reaction: Boards are expected to identify emerging risks before they escalate into operational disruptions
- Long-term alignment: Strategic decisions must balance near-term performance with sustainability and future competitiveness
The EV Transition and Regulatory Pressure
Electrification is reshaping manufacturing priorities across segments. EV platforms, battery supply chains, and charging ecosystems require long-term planning and significant coordination.
Alongside this, regulatory expectations are rising. Emission norms, sustainability disclosures, and data governance requirements are becoming more stringent, both in India and in export markets. Boards are now expected to ensure that compliance is embedded into strategy, rather than treated as a post-facto obligation.
The Need for Technical Directors
As complexity increases, the need for independent directors is under sharper scrutiny:
- Rising demand for domain expertise: Manufacturing boards increasingly value directors with hands-on engineering or industrial experience
- Better risk questioning: Technical directors help boards interrogate safety, quality, and compliance risks more effectively
- Governance, not operations: The role is not execution, but informed oversight rooted in practical understanding
- Listed company relevance: For publicly traded firms, technical governance strengthens accountability to investors and regulators
Why Board Composition Is Under Scrutiny
As manufacturing becomes more complex, companies are reassessing the skills they need at the board level. There is a growing recognition that financial and legal expertise alone may not be sufficient. Technical understanding of engineering processes, quality systems, and operational risk is gaining relevance.
This has led to increased interest in independent directors with deep manufacturing backgrounds, particularly in listed companies. The objective is not operational involvement, but informed questioning and better risk anticipation.
Sustaining the Opportunity
Looking ahead, boards must contend with interconnected challenges, including industrial cybersecurity, fragmented global regulations, workforce transitions, and the governance of AI-enabled manufacturing systems. These risks are already influencing how companies are assessed by markets and policymakers.
India’s $300 billion auto manufacturing opportunity is real and within reach. Demand fundamentals remain strong, and policy support continues. However, sustaining this growth will depend less on physical expansion and more on the quality of governance guiding it.
As the sector matures, companies that pair operational strength with informed, forward-looking boards are likely to emerge more resilient. In an industry where scale amplifies both success and failure, boardroom decisions may ultimately matter as much as what happens on the factory floor.
