India's auto component industry reached a turnover of ₹7.6 lakh crore in FY26, driven by a 16.3% rise in supplies to vehicle manufacturers. While domestic demand and exports grew, a 13% increase in imports highlights the sector's reliance on specialized foreign technology.
The Indian automotive component industry recorded a turnover of ₹7.6 lakh crore in the 2025-26 fiscal year, reflecting a 12.7% growth compared to the previous year. According to data from the Automotive Component Manufacturers Association (ACMA), this performance underscores a steady period for the sector, which has maintained a compound annual growth rate of 17% over the last five years.
OEM Demand and Aftermarket Growth
The primary driver of this growth was the supply of parts to original equipment manufacturers (OEMs), which jumped 16.3% to ₹6.63 lakh crore. This segment reflects the health of domestic vehicle production, as car and commercial vehicle makers increased their procurement of locally sourced parts. Additionally, the aftermarket segment—which includes parts used for repairs and maintenance—grew by 9% to ₹1.08 lakh crore. This rise is linked to a larger number of vehicles on Indian roads and a shift toward more organized service networks.
Export Performance and Import Pressures
Indian component manufacturers faced a complex global environment during the year. Exports rose by 5% to reach $24 billion, with Europe remaining the largest market. The export basket is heavily concentrated in engine components and steering systems, which together make up more than half of the total outbound value.
However, the sector is dealing with rising import costs. Imports of auto components increased by 13% to $25.4 billion. Much of this growth in imports is tied to advanced, specialized components that are not yet widely manufactured in India, often sourced from markets like China, Japan, and Germany. This gap between export value and import costs remains a focal point for investors tracking the sector's net trade balance.
Transition to Electric Mobility
The shift toward electric vehicles (EVs) is beginning to change the composition of the industry's order books. EV components now account for 4.6% of total domestic OEM supplies, a figure that excludes lithium-ion battery packs. This suggests that while traditional combustion engine parts still dominate, manufacturers are gradually adapting their production lines for the electric transition.
Future Monitorables
Looking ahead, the industry faces several risks that could impact profit margins and production schedules. Companies in this space are exposed to fluctuations in the prices of critical raw materials and logistics costs. Additionally, geopolitical risks and potential supply chain disruptions remain a concern for firms that rely on global sourcing for high-tech components. Investors will likely track how effectively individual manufacturers can localize the production of these advanced components to reduce import reliance and how they manage the changing requirements of the domestic automotive market.