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India auto component industry delivered a strong performance in FY26

ICICIdirect Research 08 Jul 2026 DISCLAIMER

News: According to media sources, India's auto component industry delivered a strong performance in FY26, with turnover rising 12.7% YoY to ₹7.6 trillion, driven by robust domestic demand, higher vehicle production, capacity expansion, technology investments, and healthy exports. Supplies to OEMs grew 16.3% to ₹6.63 trillion, while exports increased 5% to $24 billion, with the US remaining the largest export market, accounting for 26% of shipments despite tariff-related trade tensions. ACMA highlighted that global customers continue to increase sourcing from India, although imports also rose 13%, led by China comprising of 36% of total auto component imports, up from 29% in FY25, leading to the industry's first trade deficit in two years. The association expects the sector to grow 8–10% in FY27, supported by domestic demand, localisation, and expanding global opportunities.

View: The report is structurally positive for India's auto component companies such as Uno Minda, Bharat Forge, Sansera Engineering, Lumax Auto technologies. Rising localisation, increasing global sourcing, and sustained domestic vehicle production create a favourable long-term demand environment. While US tariffs and higher imports remain near-term challenges, they also encourage multinational customers to diversify supply chains beyond China, positioning India as a preferred manufacturing hub. Companies with strong technology capabilities, export exposure, and EV-focused product portfolios are likely to be the biggest beneficiaries over the coming years.

Impact: Positive

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