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Indian Precision Machining and Auto Parts Industry Seen Growing 10 Percent Annually Through FY30
India's precision machining and auto parts industry is projected to record a 10 percent revenue CAGR between FY26 and FY30, supported by diversification into high-growth sectors such as semiconductors, defence, aerospace, electric vehicles and data centres. According to Goldman Sachs, expanding global supply chain diversification and increasing demand for precision-engineered components are expected to strengthen the industry's long-term growth prospects.
By Finblage Editorial Desk
5:35 am
23 July 2026
India's precision machining and auto parts industry is expected to witness strong growth over the next five years as manufacturers expand beyond traditional automotive applications into sectors including semiconductors, defence, aerospace, electric vehicles, consumer electronics and data centres, according to a Goldman Sachs report.
The report projects the industry's revenue to grow at a compound annual growth rate of 10 percent between FY26 and FY30. Revenue is estimated to increase from USD 85.6 billion in FY26 to USD 124.4 billion by FY30. Goldman Sachs also expects industry EBITDA to grow at a faster 15 percent CAGR during the same period, reflecting an improving product mix and higher-value manufacturing opportunities.
For the intermediate years, the brokerage forecasts revenue growth of 7 percent in FY27, 12 percent in FY28 and 10 percent in FY29 as Indian manufacturers continue to strengthen their presence in precision engineering and advanced manufacturing.
According to the report, global efforts by automotive, industrial and semiconductor companies to diversify supply chains are creating significant opportunities for Indian manufacturers. The brokerage noted that while the market has traditionally viewed Indian companies as cyclical auto component suppliers, many manufacturers are now expanding into precision machining and engineering solutions that cater to a wider range of industries with more stable and higher-margin demand.
Goldman Sachs identified electrification, rising exports, the implementation of the Eighth Pay Commission, the global relocation of internal combustion engine manufacturing and increasing demand from defence, aerospace, semiconductor and consumer electronics industries as key structural growth drivers. India's competitive manufacturing costs and a relatively protected domestic market are also expected to support long-term industry expansion.
The report concluded that Indian auto component manufacturers are well positioned to capture higher-value manufacturing opportunities as multinational companies continue to diversify their sourcing strategies and demand for precision-engineered components rises across multiple sectors.
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