[color=hsl(0,0%,0%)]India’s auto component industry delivered a resilient performance in the first half of FY2026, growing 6.8 per cent year-on-year to Rs 3.56 lakh crore, even as global markets remained volatile. The growth was anchored in stable domestic demand, a strong aftermarket and continued investments by manufacturers in capacity expansion, localisation and technology upgrades, according to industry data released by Automotive Component Manufacturers Association (ACMA).
[color=hsl(0,0%,0%)]The first-half performance (April–September 2025) highlights the sector’s ability to hold its ground amid supply-chain disruptions, cost pressures and weak demand in key global markets.
[color=hsl(0,0%,0%)]OEM Supplies Lead Growth, Aftermarket Stays Strong
[color=hsl(0,0%,0%)]Supplies to vehicle manufacturers remained the biggest growth driver. Sales to OEMs rose 7.3 per cent to Rs 3.04 lakh crore, supported mainly by demand from passenger vehicles and light commercial vehicles. This reflects relatively stable production levels in these segments during the period.
[color=hsl(0,0%,0%)]The aftermarket once again proved to be a key pillar of strength. It expanded by a robust 9 per cent to Rs 53,160 crore, benefiting from a growing vehicle population, increased formalisation of repair and maintenance services, and deeper penetration of organised distribution channels. For component makers, this segment continues to offer steady volumes and better resilience during demand fluctuations.
[color=hsl(0,0%,0%)]Exports Grow Amid Tough Global Conditions, Trade Balance Turns Negative
[color=hsl(0,0%,0%)]On the trade front, exports of auto components rose 9.3 per cent year-on-year to USD 12.2 billion in H1 FY26. This growth came despite significant global headwinds, including supply-chain disruptions, raw material price pressures and weakening demand in major overseas markets.
[color=hsl(0,0%,0%)]However, imports grew faster, rising 12.5 per cent to USD 12.3 billion. As a result, the sector slipped into a trade deficit of USD 180 million during the first half, compared to a trade surplus of USD 150 million in the same period last year. The United States and Germany continued to be among the top destinations for Indian auto component exports, while China, Japan and Germany remained the largest sources of imports.
[color=hsl(0,0%,0%)]EV Supplies Gain Traction in OEM Mix
[color=hsl(0,0%,0%)]Electric vehicle components accounted for 4.6 per cent of total supplies to OEMs in H1 FY26, underlining the industry’s gradual but steady shift towards new-age mobility. While EVs are still a small part of the overall market, their rising share reflects growing investments in localisation and technology readiness across the component ecosystem.
[color=hsl(0,0%,0%)]Industry Focuses on Localisation and Resilience
[color=hsl(0,0%,0%)]Industry leaders believe the first-half performance underscores the underlying strength of India’s automotive ecosystem. While export growth has remained healthy, the faster rise in imports has sharpened the focus on deeper localisation, capacity building and closer collaboration across the value chain.
[color=hsl(0,0%,0%)]At the same time, the operating environment continues to be shaped by geopolitical uncertainties, supply-chain challenges and cost pressures. Availability of critical materials, including rare-earth magnets, and the need to strengthen supply-chain resilience remain key concerns for sustaining long-term growth.
[color=hsl(0,0%,0%)]Outlook Improves for Second Half on Policy Support
[color=hsl(0,0%,0%)]Looking ahead, the industry is optimistic about a stronger second half of FY26. Improving retail sentiment, seasonal demand and infrastructure-led activity are expected to support volumes. The reduction in GST on select vehicle categories after September is also likely to boost demand, particularly in passenger vehicles and two-wheelers, with positive spillovers for component manufacturers.
[color=hsl(0,0%,0%)]Continued strength in tractors and a gradual recovery in commercial vehicles could further lift demand as utilisation levels improve. That said, the sector remains watchful of persistent headwinds such as rising freight costs, raw material price volatility and ongoing geopolitical risks.
[color=hsl(0,0%,0%)]Overall, the H1 FY26 numbers point to a sector that is navigating challenges with resilience, while positioning itself for the next phase of growth driven by domestic demand, policy support and the gradual transition to new mobility technologies. |
