The Automotive Component Manufacturers Association of India (ACMA) reported that India’s auto component industry grew 12.7 per cent in FY26, led by a 16.3 per cent rise in supplies to original equipment manufacturers as vehicle production strengthened across passenger vehicles, commercial vehicles and two-wheeler segments. The aftermarket segment expanded nine per cent, supported by a growing vehicle base and greater formalisation of repair and maintenance services. Supplies to the electric vehicle segment accounted for four point six per cent of original equipment manufacturer sales.

ACMA said exports rose five per cent while imports climbed 13 per cent, producing a trade deficit of United States dollar (USD) 1.37 bn. Higher shipments to Europe led export growth amid expectations of a favourable free trade agreement and increased procurement by European manufacturers. Engine components and drive transmission and steering systems accounted for over half of exports while imports were led by supplies from China, Japan and Germany.

The report identified tailwinds such as policy focus on carbon neutrality, expansion of free trade agreements, infrastructure development and rising domestic vehicle demand. It also cited increased investment, capacity expansion and the entry of new players in the mobility space as supportive factors. At the same time the association warned of geopolitical uncertainties including the Russia–Ukraine conflict, tensions in West Asia and trade restrictions that could affect markets.

Other challenges highlighted included limited availability of rare earth magnets, raw material price volatility, higher insurance and freight costs and shortages of skilled labour. The report urged monitoring of supply chain risks and policy measures to bolster local manufacturing and improve trade balances through diversification and investment. ACMA recommended targeted incentives for domestic producers.