Independence Day Special: Can Homegrown Startups Shape the Future of Mobility By 2047?

The cacophony that defined Delhi's streets over 25 years ago has given way to a quieter revolution as smoke-belching buses and auto-rickshaws are being replaced by e-buses and CNG-powered autos. Electric delivery vehicles such as the TVS iQube, Yulu DeX NV, Mahindra Treo Zor and more, now glide silently through the capital's lanes. In fact, in September 2010, under then-CM Sheila Dikshit, Delhi became the first city in the country to introduce CNG-electric hybrid buses.

Automotive Mission Plan 2047

Now, India has laid out an ambitious mobility vision for 2047, when the nation will celebrate a century of independence. The scale of this ambition recently became clear when the Centre unveiled its roadmap through the Automotive Mission Plan 2047, a comprehensive strategy to position India as a global automotive powerhouse. 

However, the question remains: Will it be possible to achieve this? India's mobility startups, battery manufacturers, and drone companies will play a major role.

According to Nomura Research Institute (NRI), a Japanese IT solutions, economic research and consulting firm, programmes such as Digital India, Gati Shakti, Startup India, and FAME II are developing advanced regulatory frameworks and setting the stage for growth towards clean, connected, and autonomous mobility. 

"Investment and innovation are increasingly focusing on next-era mobility like EVs, battery tech, urban air mobility (eVTOL), AI-powered logistics, MaaS (Mobility as a Service), and shared mobility platforms. With >$7 billion government allocation to infrastructure, mega players are scaling up," Ashim Sharma, Senior Partner & Group Head at Nomura Research Institute, told ACKO Drive.

"Some startups are delivering durable, cost-effective two- and three-wheelers for Africa, Southeast Asia, and other value-driven markets, while traditional OEMs are also ramping up exports," Sharma added.

Garuda Aerospace Leads Air Mobility

"Drone taxis are a very good idea for heavily dense major Indian cities. Currently, there are just few players working to develop solutions in the market, and some have successfully closed funding rounds. Multiple international players have also shown an interest in the Indian market," Sharma also said.

This potential for urban air mobility is being realised by Indian startups. Moving in this direction is homegrown Garuda Aerospace, which makes drone solutions for agriculture, defence, infrastructure, and disaster management. The Chennai-headquartered firm recently announced an investment in Andhra Pradesh to establish India's first "Drone City", which would be a hub for drone innovation, research, and development. In a bid to make India self reliant in manufacturing drones locally, the company is working towards full indigenisation of supply and production and make them affordable, the company had told ACKO Drive in Q2 this year.

Asked how the company is working with regulators to create frameworks for drone taxis and autonomous aerial systems for Indian airspace in the future, Agnishwar Jayaprakash, Founder and CEO, Garuda Aerospace told ACKO Drive: "We collaborate closely with regulatory bodies like the Directorate General of Civil Aviation (DGCA) and the Ministry of Civil Aviation to shape the future of urban air mobility. This partnership is vital for creating the necessary frameworks for drone taxis and autonomous aerial systems. This provides real-world data and technical expertise to regulators, informing policy on safety standards, operational protocols, and airspace management."

The Chennai-headquartered drone manufacturing company, has recently secured an export permit, which opens doors to the US, Australia, and Middle East markets. Backed by cricketer MS Dhoni, it intends to focus on agricultural and security drone solutions for these international markets.

Battery Maker Amara Raja's Local Manufacturing

Market research firm Counterpoint Research says India has the potential to be a global mobility hub by exporting cost-optimised subsystems, ADAS/IVI, voice/AI tuned for complex traffic and languages, fleet electrification, smart logistics stacks, and battery second-life solutions suited to hot and price-sensitive markets. 

While drone technology captures headlines, the foundation of India's mobility revolution lies in battery manufacturing. Telangana-based Amara Raja Energy & Mobility is making customisable Battery Management Systems (BMS) and smart battery technologies that are optimised for local conditions and can empower homegrown startups and automakers.

"Amara Raja is evaluating opportunities for collaboration for next-gen technologies on case-to-case basis, and we are quite confident of our efforts to bring state-of-the-art mobility solutions," said Vijayanand Samudrala, President, New Energy Business, Amara Raja Energy & Mobility.

The battery maker has already joined hands with the likes of Ather Energy, Piaggio India and Atul Greentech for development and supply lithium-ion cells, battery solutions and EV chargers, which are specially designed for Indian climate.

Supply Chain Challenges

However, despite these promising developments, significant roadblocks remain that could derail India's mobility ambitions. Risks to execution include "Slow localisation of cells, materials, power semis, fragmented certification and safety standards (ADAS, UAM, recycling), urban grid and land constraints for fast charging, scaling functional safety and cybersecurity talent, capital intensity versus payback in hardware, and rising data and cybersecurity compliance as vehicles become software-defined," said Soumen Mandal, Senior Analyst at Counterpoint Research.

Echoing similar sentiments, Sharma of Nomura Research added: "In India’s mobility sector, growth is often hindered by infrastructure and supply chain bottlenecks, with tier-2/3 cities and rural areas lacking adequate roads, charging stations, and logistics hubs, while fragmented supply chains and limited local vendors for components, batteries, and electronics lead to quality issues, delays, and higher costs." 

Sharma further noted that the lack of some critical raw materials poses supply chain resilience risks as well as unpredictable higher costs. 

Amid competition from China and Europe, India’s auto component exports already exceed imports, with localisation of batteries, motors, and electronics allowing for a cost and innovation edge, supported by Production Linked Incentive (PLI) schemes, according to Nomura Research.

Rare Earth Materials Crisis

The Indian automobile industry is feeling the squeeze due to the rare earth magnets crisis. Electric bike output has taken a hit, and Bajaj Auto for example cut production by up to 50 per cent last month.

It is pertinent to note that rare earth magnets are used in almost every device these days. They are present in compressors for ACs and refrigerators, mobile phones, storage devices, and automobiles. 

Attero To Meet Half Of India's Rare Earth Magnet Needs

E-waste recycling and lithium-ion battery recycling startup Attero says India's demand for rare earth magnets is roughly around $10 billion every year. 

"Our current capacity for rare earth material extraction is roughly one tonne per day which is being expanded to 100 tonnes per day in the next 12-24 months. This will meet about 50 per cent of India's need for rare earth magnet requirements," Nitin Gupta, Attero CEO and Co-Founder informed.

Based on estimates compiled by Attero, the global rare earth elements (REE) sector is likely to grow to $10.9 billion by 2029, expanding at a CAGR of 12.6 per cent. The market for REE magnets is forecast to surpass $30.3 billion by 2033.

While homegrown startups such as Garuda Aerospace are pioneering drone technologies and Amara Raja is making batteries locally, both customised for India, the path forward requires navigating significant infrastructure gaps, supply chain vulnerabilities, and the ongoing rare earth materials crunch.

The success of India's overall mobility market will eventually depend on how quickly the ecosystem can overcome these execution challenges.