ACMA President Vikrampati Singhania has urged the auto component sector to shift from low-cost manufacturing to high-value design and innovation. While the industry reached a record turnover of ₹7.6 lakh crore in FY26, reliance on imports for advanced technology remains a key monitorable for long-term growth.
The Indian automotive component industry is entering a new phase of evolution. At the recent annual session held on September 2, 2026, ACMA President Vikrampati Singhania issued a call for the sector to move beyond the traditional 'Make in India' model of low-cost manufacturing. The strategic focus is shifting toward 'Create, Engineer, and Innovate in India,' a move intended to help domestic companies own intellectual property and compete more effectively on a global scale.
This call comes on the back of strong growth in FY26, where the industry reported a record turnover of ₹7.6 lakh crore, reflecting a 12.7% year-on-year increase. Domestic supplies to Original Equipment Manufacturers (OEMs) contributed significantly to this figure, rising by 16.3% to reach ₹6.63 lakh crore. While these numbers suggest a robust domestic market, leadership is highlighting that sustained growth depends on the industry's ability to transition from simple assembly to designing complex, high-value systems.
Investors and market participants, however, must look beyond top-line growth to understand the structural risks. A significant challenge lies in the sector's trade balance. While exports hit a respectable $24 billion in FY26, the country imported auto components worth $25.4 billion during the same period. This trade deficit underscores a heavy reliance on international markets for advanced electronics, sensors, and specialized technologies required for modern vehicles, including electric and software-defined architectures.
Another critical area for the industry is the inclusion of Micro, Small, and Medium Enterprises (MSMEs). As vehicle technology moves toward electrification and advanced mobility solutions, smaller suppliers face the risk of becoming obsolete if they cannot access the necessary technology, capital, and skilled labor to adapt. The ability of the broader ecosystem to modernize will be a defining factor in how successfully the industry competes against global peers who have already established leadership in these advanced vehicle technologies.
Success in this new era will require a collaborative push toward domestic R&D, with companies likely needing to increase their spending on design and engineering capabilities. Investors should track future management commentary regarding capital allocation toward research and development, as well as any signs of import substitution. The industry’s ability to reduce dependence on foreign technology while maintaining margins will be the key metric for judging the success of this shift toward innovation.