India's auto components sector is gearing up for growth of 8% to 10% this fiscal year,says Automotive Component Manufacturers Association of India (ACMA). Domestic demand and export upticks fuel this rise, even as geopolitical tensions loom.
Last fiscal,industry turnover hit ₹7.60 lakh crore ($85.9 billion),a 12.7% jump in rupee terms from year prior. Yet, trade deficit emerged after two years of surplus,with imports,especially in electronics and EV components,outpacing exports. China made up 36% of imports,underscoring dependence on foreign parts.
ACMA president Vikrampati Singhania stays bullish on the future. "Medium- to long-term outlook for Indian auto component industry remains positive," he said. Infrastructure growth, domestic demand,and Free Trade Agreements (FTAs) open doors for sector .
Vinnie Mehta, ACMA's Director General,reports a strong first fiscal quarter. "If we continue to grow as is,there should be no reason why we shouldn’t be able to maintain the growth rate that we have," he said. Expectations set for 8%-10% growth this year.
But challenges persist. Geopolitical tensions,West Asia crisis,U.S. tariffs, and Chinese trade restrictions cloud the horizon. Mehta warns these could stall future gains.
Yet, India's carbon neutrality push and FTA expansion offer hope. Mehta cites confidence in Indian manufacturing,rising domestic demand,and infrastructure as positives. OEMs ramping up capacity to meet demand is key.
ACMA says FY26 was driven by domestic demand, vehicle production,and investment in capacity and tech. Exports grew 5% to $24 billion (₹2,12,176 crore),with Europe leading. Engine,drive transmission, and steering parts made up over half of exports.
Imports surged 13% to $25.4 billion (₹2,24,287 crore),driven by demand for advanced tech and specialized parts. Top import sources: China,Japan,Germany.
Mehta notes trade deficit shift: "This time around we had a modicum of a trade deficit from the earlier past two years,where we had trade surplus." EV segment growth,low localization, pushed up electronics imports.
EV components made up 4.6% of domestic OEM supplies,minus lithium-ion batteries . Labor shortages, worsened by West Asia crisis, hit industry as workers returned home due to rising costs. Some firms offered induction cookers and stoves to retain staff.
Despite hurdles, Mehta confirms stable production: "There has been no let up in terms of production." Industry adapting to changes,eyeing global competitiveness…
