Mumbai — India’s auto components industry is expected to grow 8% to 9% in fiscal 2027, with its market size projected to reach about Rs 10.68 lakh crore, according to a new report from CareEdge Ratings.
The industry was estimated at about Rs 9.84 lakh crore in fiscal 2026. CareEdge said growth will be supported by healthy demand from original equipment manufacturers, rising component content per vehicle, resilient replacement demand, increased localization and expanding global sourcing opportunities.
“India’s auto component industry has emerged as an increasingly important part of the global automotive supply chain, supported by its manufacturing competitiveness, engineering capabilities, and expanding domestic market,” said Ranjan Sharma, Senior Director at CareEdge Ratings.
Sharma said further localization of critical components and investment in advanced manufacturing capabilities will be important for increasing domestic value addition and strengthening India’s position in the global automotive supply chain.
The report said the industry is entering a sustained investment-driven growth phase as domestic vehicle production expands and manufacturers add more value across the automotive supply chain.
The shift toward vehicles with greater electronic content and cleaner mobility technologies is also creating new opportunities for component makers, while localization efforts are helping reduce dependence on imports.
Total vehicle production in India increased from about 23 million units in fiscal 2022 to 34.7 million units in fiscal 2026, according to the report.
Domestic automakers accounted for about 67% of auto component industry revenue in fiscal 2026, while exports contributed roughly 22% and the aftermarket accounted for the remaining 11%.
Demand is also being supported by consumers’ growing preference for SUVs and premium vehicles, along with stricter safety and emissions standards that require more sophisticated and higher-value components.
India’s deeper integration into global automotive supply chains is expected to provide another source of growth. Auto component exports are projected to reach approximately Rs 2.3 trillion in fiscal 2027.
Electric vehicle adoption has also accelerated sharply. EV registrations rose from about 170,000 vehicles in fiscal 2020 to 2.45 million in fiscal 2026, lifting EV penetration from 0.71% to about 8.28% over the period.
“The industry’s ongoing transition towards electronics-intensive and cleaner mobility platforms is creating new opportunities across EV-linked components, advanced electronics, powertrain technologies, and other high-value automotive systems,” said Arti Roy, Associate Director at CareEdge Ratings. (Source: IANS)
