Supply Chain Diversification Creates Opportunities for India's Auto Component Industry: ACMA President

India's auto component industry is poised to capitalise on global supply chain diversification, with exports expected to double or even triple from the current USD 24 billion as companies seek alternatives to China-centric sourcing, according to ACMA President Vikrampati Singhania.

The industry recorded a turnover of INR 7.6 lakh crore (USD 85.9 billion) in FY 2025–26, up 12.7% from the previous fiscal year, driven by robust domestic demand, higher vehicle production, and sustained investments in capacity and technology. Supplies to OEMs grew 16.3%, while the aftermarket expanded 9% .

Exports rose 5% to USD 24 billion, with Europe recording the strongest growth and engine components together with drive, transmission, and steering components accounting for more than half of export value . However, imports increased 13% to USD 25.4 billion amid growing demand for advanced-technology products and specialised components, widening the trade deficit .

Global realignments create openings

Speaking to MarkLines following ACMA's annual press conference, Singhania described the current global trade realignments as "opportunistic times" for the Indian auto component industry . He noted that the sector is finding ways to stay cost-competitive, reduce costs further, and diversify into new markets.

"LATAM is important, Africa is important, and Europe remains a large and competitive market," Singhania said, identifying promising geographies for Indian component manufacturers. "We should also look at Australia. Interestingly, even China is an opportunity in certain technologies where India is competitive" .

He emphasised that the industry is clear about its export ambitions: "Exports need to double or even triple from the current USD 22 billion, and that will come by opening up new markets" .

Localisation and technology transition

While imports have risen due to demand for advanced technologies, Singhania stressed that the industry is actively working on localisation. "Over the last two to three years, ACMA and OEMs have worked closely on localisation, and it has been very successful in traditional parts," he said.

He noted that imports today mainly come from new technologies or very low-volume products. "As new technology ecosystems, especially in electronics, get built in India, imports will gradually reduce. Raw material imports like specialty chemicals, polymers, and steels will still happen, but as domestic capacities grow, we will see the import bill coming down" .

Singhania also highlighted the importance of learning from global leaders. ACMA recently led an industry delegation to China to study emerging technologies, automation, and electric vehicle manufacturing. "We went to the China Auto Show, saw all the new technologies being showcased there. We went into the supply chain. We visited about eight-nine different factories in electronics, in battery supply systems, in traditional components," he said. "It's interesting to see the scale that they operate. It's also interesting to see the amount of automation that they put in place. We certainly learned from it, and we certainly will implement that as we go forward".

EV components gaining momentum

Supplies of electric vehicle components, excluding lithium-ion batteries, represented 4.6% of domestic OEM supplies in FY 2025–26. Singhania has previously outlined three priorities for India's EV localisation roadmap: developing advanced capabilities in power electronics and Silicon-Carbide inverters; accelerating R&D in materials, including alternatives to rare-earth magnets; and creating a world-class ecosystem for design, testing and validation to meet global standards efficiently .

"High-value systems such as motors, power electronics, thermal management, precision magnetics, BMS and embedded software account for more than 60% of an EV's value. These are areas where India can build globally competitive scale," he said .

Supply chain resilience and strategic priorities

Singhania described supply chain resilience as "critical" for the industry going forward . "Companies need better sourcing strategies and stronger risk mitigation," he said. "Skilling is another big agenda on how we prepare our teams for Industry 4.0 and new technologies" .

He noted that the government has been "very responsive" to industry concerns, with ACMA engaging closely on issues such as E20 fuels, policy reforms, and industry competitiveness . GST reforms, including the rationalisation of rates to a uniform 18% for auto components, have already simplified operations and boosted demand .

Singhania expressed confidence about the industry's near-term outlook. "First quarter numbers also stay robust," he said, adding that he expects the industry to deliver "upper single-digit or early double-digit" growth in FY 2025–26 .

"The industry will grow with OEMs, but the real opportunity is beyond India," Singhania concluded. "We have already become a global supplier, and that advantage will only deepen. Yes, there will be bumps, but no road is smooth. The growth path is clear".