According to ACMA report, India’s auto component industry grew by 12.7% in FY26. There was strong growth in OEM and aftermarket. Exports rose 5%, but imports rose 13%, widening the trade deficit to $1.37 billion.
India’s auto component industry recorded a strong growth of 12.7 per cent in FY26, according to a report by the Automotive Component Manufacturers Association of India (ACMA). Exports grew by 5 percent during this period, however, imports grew faster than exports, increasing the trade deficit.
The report said that India’s auto component industry grew by 12.7 percent in FY 26. This growth was driven by 16.3 per cent growth in supplies to OEMs (Original Equipment Manufacturers) amid strong production of passenger vehicles, commercial vehicles and two-wheelers. At the same time, the aftermarket segment expanded by 9 percent, supported by the growing vehicle base and market formalization. According to the report, growth in the aftermarket segment was driven by increasing demand for used vehicles, shift towards larger and more powerful vehicles and increasing formalization of the repair and maintenance market.
Exports increased, but imports raised concerns
India’s exports witnessed a healthy growth of 5 per cent, while imports grew by nearly 13 per cent, resulting in a trade deficit of $1.37 billion. Supplies to the EV segment accounted for 4.6 percent of OEM sales. The growth in exports was mainly due to an increase in shipments to Europe, led by expectations of favorable FTAs (free trade agreements) and increased purchases by European OEMs. Engine components and drive transmission and steering systems accounted for more than half of exports. However, imports outpaced exports, led by supplies from China, Japan and Germany. Drive transmission, steering and engine components contributed 56 percent of the total imports.
Opportunities and challenges facing the sector
The report highlights several opportunities (tailwinds) and challenges (headwinds) for the auto component sector. Key growth drivers include government focus on carbon neutrality, expansion of FTAs opening up new markets, infrastructure development, growing demand for domestic vehicles, stable export prospects, increased investment, capacity expansion and entry of new players in the mobility space. However, the sector faces challenges from geopolitical uncertainties including the Russia-Ukraine conflict, Middle East tensions, US tariffs and Chinese trade sanctions. Other challenges include limited availability of rare earth magnets, volatility in raw material prices, high insurance and freight costs, and labor shortages, the report said.
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