India's automotive component industry reached $75 billion in revenue in FY26 and is on track to achieve the Automotive Component Manufacturers Association (ACMA) target of $100 billion by 2030, driven by three powerful growth drivers: the robust expansion of domestic vehicle production, a structural shift in global supply chains that is increasing exports from India as an alternative to China, and the rapid growth of EV-specific components that requires new product ranges and capabilities from traditional ICE component manufacturers. The industry employs over 15 lakh people directly and a further 35 lakh in downstream activities, making it one of India's most important manufacturing employment sectors.
EV component localisation is the most transformative challenge and opportunity facing India's component industry. Traditional ICE components like engine blocks, gearboxes, fuel systems and exhaust systems face long-term structural decline as EV penetration grows, while new categories including traction motors, power electronics inverters, battery management systems, thermal management components, regenerative braking systems and high-voltage wire harnesses require significant new product development and manufacturing investment. Companies that successfully navigate this transition — like Minda Industries (which has pivoted aggressively to EV electronics), Endurance Technologies (brake systems for EVs), Valeo Siemens eAutomotive (traction motors) and Sona BLW Precision (differential gears for EVs) — are expected to gain disproportionate share of the growing EV supply chain.
Export growth has been particularly strong, with India's auto component exports reaching $22 billion in FY26 — a 16% increase over FY25 — as global OEMs and Tier 1 suppliers accelerate diversification away from China-centric supply chains following supply chain disruptions during the pandemic and growing geopolitical risk concerns. India supplies components to 160+ countries, with the US, Germany, UK, France and Japan being the largest markets. Aluminium castings, forgings, precision machined parts, body stampings, plastic injection moulded parts and electrical components are among the categories where Indian manufacturers have established strong competitive positions based on quality, scale and cost competitiveness.
The semiconductor content in vehicles — critical for ADAS safety features, infotainment, powertrain management and body electronics — is one of the most rapidly growing auto component categories globally, and India is beginning to develop indigenous capabilities in this area. Minda, Valeo India and Bosch India are all investing in automotive semiconductor integration capabilities, while startups including Saankhya Labs (working on automotive-grade V2X communication chips) and Steradian Semiconductors (radar ICs for ADAS) represent the emerging wave of deep-tech auto semiconductor development in India. As vehicles become increasingly software-defined, the software development capabilities that are deeply embedded in India's technology sector represent a major competitive advantage for Indian auto component companies.
Policy support from the government has been crucial in enabling the component industry's growth. The PLI scheme for advanced automotive technology covers EV-specific components with incentives of 13-18% on incremental sales, making India one of the most competitive manufacturing locations for EV components globally. The government's vehicle scrappage policy is also driving component demand by accelerating fleet renewal as older vehicles are retired, increasing the new vehicle volumes that feed component demand. ACMA and SIAM (Society of Indian Automobile Manufacturers) have jointly recommended several additional policy measures including preferential procurement of Indian auto components in government fleet purchases, dedicated component testing infrastructure and harmonisation of standards with global norms to facilitate export compliance — measures that are under active consideration by the Ministry of Heavy Industries.
