India's auto component industry recorded a turnover of Rs 7.6 lakh crore (USD 85.9 billion) in FY26, marking a 12.7% year-on-year increase, according to the Automotive Component Manufacturers Association of India (ACMA). The industry's growth was driven by strong domestic demand, higher vehicle production, continued investments in manufacturing capacity and technology, and stable export performance.

The industry has more than doubled in size over the past five years, delivering a compound annual growth rate (CAGR) of 17% between FY21 and FY26. ACMA attributed this expansion to sustained growth across the automotive ecosystem and increasing competitiveness of Indian component manufacturers.

Supplies to original equipment manufacturers (OEMs) remained the largest revenue contributor, rising 16.3% year-on-year to Rs 6.63 lakh crore (USD 75 billion). Growth was supported by higher production across passenger vehicles, commercial vehicles and two-wheelers, reflecting healthy demand in the domestic automobile market.

The aftermarket segment also maintained its growth momentum, with revenues increasing 9% year-on-year to Rs 1.08 lakh crore (USD 12.3 billion). The expansion was driven by a growing vehicle population, rising demand for used vehicles and greater formalisation of the vehicle repair and maintenance ecosystem.

Auto component exports increased 5% year-on-year to Rs 2.12 lakh crore (USD 24 billion), with Europe emerging as the fastest-growing export market. Engine components along with drive, transmission and steering systems accounted for more than half of India's component exports during the year.

Imports grew at a faster pace than exports, rising 13% year-on-year to Rs 2.24 lakh crore (USD 25.4 billion), reflecting increased demand for advanced technologies and specialised components. China, Japan and Germany continued to be the largest sourcing markets for imported auto components.

ACMA also noted that components supplied for electric vehicles accounted for 4.6% of domestic OEM supplies during FY26, excluding lithium-ion batteries, indicating the gradual expansion of India's EV supply chain.

Commenting on the industry's performance, ACMA Director General Vinnie Mehta said robust domestic demand, continued investments in technology and manufacturing capacity, and increasing confidence among global customers enabled the industry to deliver another year of healthy growth despite a challenging international environment. He added that the rise in imports of advanced technology products highlights the need to accelerate localisation, strengthen domestic technology capabilities and move further up the manufacturing value chain.

Looking ahead, ACMA President Vikrampati Singhania said the industry's medium- and long-term outlook remains positive, supported by rising domestic demand, infrastructure-led economic growth, manufacturing investments, free trade agreements and increasing global sourcing from India. However, he cautioned that geopolitical uncertainties, supply chain disruptions, availability of critical minerals, logistics costs and raw material price volatility remain key challenges for the sector.

According to ACMA, the industry will continue to focus on localisation, advanced manufacturing, innovation and sustainable mobility solutions to strengthen India's position as a global automotive manufacturing and sourcing hub.