Synopsis: India’s auto component industry grew 12.7% in FY26, driven by strong OEM demand, rising EV adoption, and a growing aftermarket. Despite a widening trade deficit, long-term growth prospects remain supported by favorable industry tailwinds.
India’s auto component industry is entering a new phase of growth, driven by rising vehicle production, increasing localization, and the rapid adoption of electric vehicles (EVs). According to industry estimates, the sector is expected to grow from around USD 80–85 billion currently to nearly USD 145 billion by 2030, supported by strong domestic demand, export opportunities, and government initiatives promoting advanced manufacturing and clean mobility.
The momentum is already visible, with the industry reporting 12.7% growth in FY26, led by a 16.3% increase in supplies to Original Equipment Manufacturers (OEMs). As automakers ramp up production and EV penetration continues to rise, auto component manufacturers are expected to play a pivotal role in India’s ambition of becoming a global automotive manufacturing hub.
Robust Industry Growth
India’s auto component industry demonstrated strong performance in FY26, achieving a growth rate of 12.7%. This expansion was primarily driven by a significant 16.3% increase in supplies to Original Equipment Manufacturers (OEMs). This surge correlates directly with robust vehicle production across multiple domestic categories, including passenger vehicles, commercial vehicles, and two-wheelers.
Complementing the OEM growth, the aftermarket segment expanded by 9% during the same fiscal year. This upward trajectory was sustained by an overall expanding vehicle base and a noticeable shift toward market formalisation.
Key contributing factors included a rising consumer demand for used vehicles, an increasing preference for larger, more powerful vehicles, and the steady formalisation of the repair and maintenance sector. Furthermore, supplies catering specifically to the electric vehicle (EV) segment gained traction, accounting for 4.6% of total OEM sales.
Widening Trade Deficit
Despite a healthy 5% growth in exports, largely propelled by higher shipments to Europe due to anticipated favorable Free Trade Agreements (FTAs) and ramped-up procurement by European OEMs, imports grew at a much faster pace. Driven by supplies from China, Japan, and Germany, imports rose by approximately 13%.
This imbalance resulted in a trade deficit of USD 1.37 billion for the sector. Notably, drive transmission, steering systems, and engine components were highly active on both sides, accounting for over half of all exports and 56% of total imports.
Sector Tailwinds and Growth Drivers
The industry benefits from several key forward-looking growth drivers. Government initiatives focusing on carbon neutrality, infrastructure development, and the expansion of FTAs to unlock new international markets remain vital. Additionally, strong domestic vehicle demand, stable long-term export prospects, increased capital investments, capacity expansions, and the entry of new players into the mobility space serve as major tailwinds.
Conversely, the auto component sector faces notable headwind risks. Ongoing geopolitical uncertainties, such as the Russia-Ukraine conflict, tensions in West Asia, US tariffs, and Chinese trade restrictions, continue to create market friction. Operationally, the industry is navigating challenges tied to the limited availability of rare earth magnets, raw material price volatility, elevated insurance and freight costs, and domestic labor shortages. Stocks to watch
Sona BLW Precision Forgings Ltd
Sona BLW Precision Forgings is one of India’s leading manufacturers of precision-forged components with a strong focus on electric vehicle (EV) technologies. The company supplies differential gears, traction motors, and driveline systems to global and domestic OEMs. With a market capitalisation of Rs. X cr, the shares of X closed at Rs. X per share, up from its previous close of Rs. X per share.
UNO Minda Ltd
UNO Minda is a diversified auto component manufacturer with a broad portfolio spanning lighting systems, switches, alloy wheels, sensors, and EV components. As a key supplier to leading passenger vehicle and two-wheeler manufacturers, the company stands to gain from higher domestic vehicle production, premiumisation trends, and the growing electrification of the automotive industry. With a market capitalisation of Rs. X cr, the shares of X closed at Rs. X per share, up from its previous close of Rs. X per share.
Bharat Forge Ltd
Bharat Forge is a leading supplier of forged and engineered components serving both domestic and global OEMs across the automotive, commercial vehicle, and industrial segments. The company is also expanding its presence in EV components and aerospace, while its strong export footprint positions it to benefit from improving global demand and higher commercial vehicle production. With a market capitalisation of Rs. X cr, the shares of X closed at Rs. X per share, up from its previous close of Rs. X per share.
Samvardhana Motherson International Ltd
Samvardhana Motherson is India’s largest auto component manufacturer with a diversified global presence across wiring harnesses, mirrors, polymer modules, and interior systems. Its extensive relationships with major global automakers and increasing vehicle content per car make it well-placed to benefit from rising exports, stronger OEM production, and long-term growth in the global automotive industry. With a market capitalisation of Rs. X cr, the shares of X closed at Rs. X per share, up from its previous close of Rs. X per share.
Endurance Technologies Ltd
Endurance Technologies is a leading manufacturer of aluminium die-castings, suspension systems, braking solutions, and transmission components. With a dominant presence in the two-wheeler market and increasing exposure to EV platforms, the company is expected to benefit from rising OEM demand, expanding aftermarket sales, and continued growth in India’s automotive sector. With a market capitalisation of Rs. X cr, the shares of X closed at Rs. X per share, up from its previous close of Rs. X per share.
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