India’s automotive component industry touched a turnover of Rs 3.32 lakh crore ($39.6 billion) during April to September period this financial year (H1FY25), reflecting an 11.3 percent growth compared to the same period last year, according to the Automotive Component Manufacturers Association of India (ACMA).
Exports of auto components increased by 7 percent to $11.1 billion (Rs 93,340 crore), while imports rose by 4 percent to $11 billion (Rs 92,050 crore), resulting in a trade surplus of $150 million.
China, despite strained relations with India in recent years, continued to dominate as the largest source of imports, accounting for 28% of India’s total auto component imports.
“There are certain components which take time (to manufacture locally) because what we need is scale, huge investment and those kinds of technologies. The ball has certainly started rolling. By 2030, we can see a completely different picture,” said Shradha Suri Marwah, President, ACMA & CMD of Subros.
Marwah also highlighted the impact of rising geopolitical tensions on the industry, especially in the freight department.
“One of the biggest things impacting us is freight, especially the Red Sea crisis. The cost has gone up and the time has gone up. This has resulted in a larger inventory which impacts working capital. Then there is the issue of foreign exchange instability. The dollar was volatile due to the US elections and the yen was moving up and down. All this impacts us,” added Marwah.
However, she is confident that the industry will log healthy growth in the second half of the financial year 2025 and the medium-term outlook remains healthy owing to strong demand coming from original equipment manufacturers (OEMs). Auto component supplies to OEMs, in the domestic market, stood at Rs. 2.83 lakh crores ($33.8 billion) grew 11.2 percent compared to the first half of the previous year. The aftermarket in H1FY25 witnessed a growth of 5 percent to Rs 47,416 crore (USD 5.7 billion).
“The festive season brought significant sales across most segments of the vehicle industry. However, reflecting on the past eight months of this fiscal year, while two-wheelers have shown promising growth, sales of passenger vehicles (PVs) and commercial vehicles (CVs) has been relatively moderate,” said Marwah.
She added that the components industry continues to make investments for purposes of higher value-addition, technology upgradation and localisation to stay relevant to both domestic and international customers.