Airbag industry in India to grow to Rs 7,000 crore by FY27: Icra

The industry size of airbags, a key safety feature in vehicles, is expected to grow to up to Rs 7,000 crore by FY2027 in India, from the current levels of around Rs 2,500 crore, according to ratings agency Icra.

The growth in the airbag industry, which is one of the fastest growing auto component segments, is expected to be fuelled by the increase in content per vehicle arising from higher regulatory requirements and voluntary increase in the number of airbags per vehicle for enhancing safety, Icra said in a statement.

"The mandatory content per vehicle for airbag manufacturers is expected to rise from Rs 3,000-4,000 currently to Rs 8,000-10,000 by October 1, 2023. The average number of airbags per car sold is about three currently, and this is expected to increase significantly post the mandatory implementation of six airbags per car from October 1, 2023," Icra Vice President and Sector Head Vinutaa S said.

Accordingly, Icra said it expects the industry to grow to Rs 6,000-7,000 crore by FY27, from the current levels of Rs 2,400-2,500 crore, at a four-year CAGR (compound annual growth rate) of 25-30 per cent.

The industry currently imports 60-70 per cent of its components primarily from overseas parents/joint venture partners, stemming from the lack of indigenous technological capability and absence of adequate volumes.

"Unless there is adequate backward integration for the incremental airbags expected to be produced, the import content would only increase further going forward," Icra said.