Auto Components Industry Likely to Grow 8-10% in FY27 Despite Global Headwinds: ACMA

India's automotive components industry is expected to grow between 8-10 per cent in the current financial year, driven by strong domestic demand and healthy export performance despite geopolitical uncertainties, the Automotive Component Manufacturers Association of India (ACMA) said on Tuesday.

The automotive industry recorded a turnover of ₹7.60 lakh crore ($85.9 billion) in FY26, marking a 12.7 per cent increase in rupee terms over the previous financial year.

"The medium- to long-term outlook for the Indian auto component industry remains positive," ACMA President Vikrampati Singhania told reporters.

Singhania said rising domestic demand, infrastructure-led economic growth, manufacturing investments, deeper global integration through free trade agreements (FTAs) and increasing global sourcing from India are creating significant opportunities for the sector.

For the first time in two years, the industry reported a trade deficit, with imports of automotive components outpacing exports.

According to ACMA, imports increased 13 per cent to $25.4 billion (₹2,24,287 crore), driven by demand for advanced technologies, electronics and electric vehicle components. China remained the largest source of imports, accounting for 36 per cent of the total, followed by Japan and Germany.

Exports, meanwhile, rose 5 per cent to $24 billion (Rs 2,12,176 crore). Europe recorded the strongest growth among export markets, while engine components along with drive transmission and steering systems continued to contribute more than half of total exports.

As per ACMA Director General Vinnie Mehta, the industry had made a strong start to FY27 and remained on course to achieve its projected growth.

He, however, cautioned that the sector continues to face external risks.

The industry also experienced labour shortages, particularly among small and medium enterprises, after the conflict in West Asia pushed up energy costs, prompting many workers to return to their native places as living expenses in urban areas increased.

ACMA said the industry's performance in FY26 was underpinned by robust domestic demand, higher vehicle production, continued investment in manufacturing capacity and technology, and steady export growth despite an uncertain global environment.

According to ACMA, the automotive components industry has more than doubled in size over the past five years, expanding at a compound annual growth rate (CAGR) of 17 per cent. 

The industry body added the sector remains well placed to strengthen India's position as a preferred global hub for automotive manufacturing and component sourcing.