Despite Tariffs and Wars, India's Auto Component Industry Grows Nearly 10% in FY25, Post Trade Surplus of $453 Million

Despite tariffs and global geopolitical tensions — including ongoing trade disruptions and wars impacting supply chains — India’s domestic auto component industry recorded a robust performance in FY25, with total turnover rising by 9.8% year-on-year to reach Rs 6.73 lakh crore, according to data released by the Automotive Component Manufacturers Association of India (ACMA) on Tuesday.

Over the past five years (FY20–FY25), the auto parts industry has grown at a compound annual growth rate (CAGR) of 14%, underscoring its steady rise in both domestic and global markets.

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OEM demand fuels growth

ACMA revealed that a major driver of this year’s performance was strong demand from original equipment manufacturers (OEMs). Component supplies to OEMs touched Rs 5.7 lakh crore, marking a 10% increase from the previous year, as per the data shared by ACMA. This growth aligned closely with an 8% rise in overall vehicle production in India, indicating that domestic manufacturing activity has remained on a healthy trajectory.

Commenting on the sector’s performance, Vinnie Mehta, Director General of ACMA, highlighted the broad-based growth across key segments.
“The Indian auto component industry continues to exhibit remarkable resilience and growth. With OEM sales, exports, and the aftermarket all expanding, the industry clocked a turnover of Rs 6.73 lakh crore ($80.2 billion) in FY25, reflecting a 9.6% increase over FY24,” he said.

Notably, India registered a trade surplus of $453 million, an improvement over the previous year’s $300 million, signalling enhanced localisation and competitiveness. The aftermarket segment, estimated at Rs 99,948 crore, also saw a 6% increase, driven by rising demand for vehicle maintenance and parts — especially in rural areas and the used vehicle market.

Export gains, import caution

India’s auto component exports rose by 8%, reaching $22.9 billion (Rs 1.92 lakh crore) in FY25, up from $21.2 billion in FY24. The United States and North America remained the largest export destinations, accounting for 32% of shipments and recording an 8.4% growth. However, exports to Europe — which make up 29.5% of total exports — declined by 2.1%, while Asia, representing 26%, saw a sharp 15.1% rise.

Leading export categories included drive transmission systems, engine components, suspensions, brakes, and body/chassis parts, reflecting India's rising technical capabilities in high-value segments.

On the import front, the industry brought in $22.4 billion worth of components, a 7.3% rise over the previous year. A significant portion — nearly two-thirds — came from Asia, with China accounting for 29% of total imports, maintaining its position as the top sourcing destination for India.

Aftermarket grows

The aftermarket segment, which includes replacement parts and service components, grew 6% year-on-year, driven by the expansion of the used vehicle market, increased e-commerce penetration, and greater formalisation in repair services. The total aftermarket value stood at Rs 99,948 crore ($11.8 billion) in FY25.

Thrust on new-age Mobility

ACMA President and Subros CMD, Shradha Suri Marwah, noted that the sector continues to serve as a pillar of Indian manufacturing.
“FY25 was another milestone year, supported by strong domestic demand, rising exports, and value addition. As India moves toward new-age mobility, the industry is investing in technology, localisation, and capability building to serve global and domestic markets more effectively,” she said.

Huge Focus on New-Age Mobility
ACMA President and Subros CMD, Shradha Suri Marwah, noted that the sector continues to serve as a pillar of Indian manufacturing.
“FY25 was another milestone year, supported by strong domestic demand, rising exports, and value addition. As India moves toward new-age mobility, the industry is investing in technology, localisation, and capability building to serve global and domestic markets more effectively,” she said.