India’s automotive component industry is entering a new phase of growth, with the next big opportunity lying not merely in manufacturing more components but in developing technologies, systems and intellectual property that can move Indian suppliers higher up the global value chain.
The transformation comes at a time when the industry is expanding rapidly. According to the Automotive Component Manufacturers Association of India (ACMA), the sector recorded its highest-ever turnover of ₹7.59 lakh crore in FY2025-26, registering 12.7% growth over the previous year. Exports rose 5% to $24 billion, while imports increased 13% to $25.4 billion, reflecting growing demand for advanced and specialised technologies. The widening gap between exports and imports, however, highlights the next challenge for Indian manufacturers—developing greater domestic capability in advanced technologies.
“India’s opportunity is no longer limited to becoming a low-cost manufacturing destination. The next phase has to be about building engineering capabilities, developing intellectual property and creating technologies that can be scaled globally. The transition from component manufacturing to technology-led manufacturing will determine how much value India captures from the global mobility transformation,” said Adithya Jayakar, Deputy Managing Director, UCAL Ltd.
The shift is already visible across the automotive ecosystem. Vehicles are increasingly incorporating electronic control units, sensors, actuators, electric pumps, power electronics and connected systems, irrespective of whether they are powered by an internal combustion engine, hybrid technology or batteries.
ACMA data shows that supplies of electric vehicle components, excluding lithium-ion batteries, accounted for 4.6% of domestic OEM supplies in FY26. At the same time, imports of advanced technology products and specialised components increased, underlining the need to accelerate localisation.
“Indian component manufacturers must move from being build-to-print suppliers to technology partners. That requires sustained investment in R&D, engineering capability and intellectual property creation,” said Vikrampati Singhania, President, ACMA, in an industry assessment.
For India, the opportunity extends beyond electric vehicles. The country’s diverse mobility landscape is likely to see multiple powertrain technologies coexist for years, creating demand for sophisticated components across internal combustion, hybrid, alternative-fuel and electric platforms.
The transformation also offers an opportunity to strengthen India’s position in global supply chains. With exports already reaching $24 billion, Indian manufacturers can increasingly target global OEMs seeking diversified and resilient supply chains. Europe has emerged as the fastest-growing export market for Indian auto components.
Experts believe that cost competitiveness alone will not be sufficient to sustain this momentum. Indian suppliers will need to combine frugal engineering with quality, automation, digital manufacturing, product development and global certification standards.
“The real competitive advantage will come from combining India’s engineering talent and cost efficiency with innovation and product ownership. If Indian suppliers can develop technologies here and take them to global markets, the auto-component industry can become one of the country’s strongest manufacturing and export engines,” Adithya Jayakar said.
The transition, however, will require a broader ecosystem involving OEMs, component manufacturers, technology companies, academia and policymakers. Greater access to R&D funding, stronger industry-academia collaboration, skilled manpower and a domestic ecosystem for critical electronics and materials will be essential.
India has already established itself as a significant global auto-component manufacturing base. The next opportunity is to ensure that “Made in India” does not simply mean manufactured in India, but also designed, engineered and technologically developed in India.
