Auto components industry expected to grow 8-10% in FY27: ACMA
India’s auto components sector is expected to grow 8-10% in the current fiscal, driven by domestic demand and strong exports despite geopolitical headwinds, industry body ACMA said on Tuesday.
The industry posted a turnover of ₹7.60 lakh crore ($85.9 billion), up 12.7% in rupee terms from the previous fiscal, the Automotive Component Manufacturers Association of India (ACMA) said. It ran a trade deficit for the first time in two years as the country’s exports fell short of imports of auto components, particularly electronic and electric vehicle parts, with China accounting for the largest share of total imports at 36%. The industry has also seen labor shortages, specifically in SMEs, as a result of the war in West Asia, which led to workers migrating to their hometowns as the cost of living in cities rose due to rising energy costs. “The medium to long-term outlook for the Indian automotive industry remains positive,” ACMA President Vikrampati Singhania told reporters.
Rising domestic demand, infrastructure-driven economic growth, expanding investment in manufacturing, deeper global integration through free trade agreements and growing global sourcing from India are creating significant opportunities for the industry, said Mr. Singhania, who is also vice-chairman and managing director of JK Fenner (India).
Asked about the growth outlook for FY27, ACMA CEO Vinnie Mehta said: “The first quarter was a very strong quarter. If we continue to grow as we are, there should be no reason why we should not be able to maintain the growth rate we have. We can expect 8 to 10% growth for the year.” “Geopolitical challenges such as the crisis in West Asia, the US tariff situation, the largest export market for the industry and Chinese trade restrictions are some of the headwinds the industry faces going forward,” he added. On the other hand, the government’s focus on carbon neutrality, multiple FTAs and growing global confidence in Indian manufacturing, rising domestic demand, infrastructure development, capacity expansion by OEMs and mobility new entrants are tailwinds for the components industry, noted Mr. Mehta.
The industry body said FY26 performance was driven by strong domestic demand, higher vehicle production, sustained investment in capacity and technology and steady export growth despite an increasingly uncertain global environment.
Over the past five years, the industry has more than doubled and expanded at a CAGR of 17%, reaffirming India’s emergence as a globally competitive automotive manufacturing base, it added.
ACMA said the auto components industry continues to be well positioned to strengthen India’s role as a preferred global automotive manufacturing and sourcing hub.
Last fiscal, exports grew by 5% to $24 billion (₹2,12,176 crore).
Europe saw the strongest growth, while engine and transmission and steering components continued to account for more than half of exports, ACMA said. On the other hand, imports rose 13% to US$25.4 billion (₹2,24,287 crore), driven by higher demand for advanced technology and specialized components. China, Japan and Germany remained the main supply markets, he added.
Commenting on the trade deficit, Mehta said, “This time we had a small trade deficit from the previous two years when we had a trade surplus.” Steady growth in the EV segment, where localization is not high, along with electronic parts imports, was primarily responsible for the increase in total imports, he added.
EV component shipments accounted for 4.6% of domestic OEM shipments, excluding lithium-ion batteries.
Mr. Mehta also noted that the components industry also faced labor shortages after the outbreak of the crisis in West Asia, as “the cost of living in cities has gone up very significantly as energy costs have gone up,” and many companies have even provided workers with induction cookers and stoves to keep them going.
However, there has been no impact on production and “there has been no relaxation in terms of production”, he noted.
Published – 7 Jul 2026 20:21 IST