As disruptions continue across key global trade routes, including the Red Sea and the Strait of Hormuz, industry stakeholders say India’s auto component sector is seeing the impact across logistics, supply chains, and input costs.
“We are seeing greater supply chain volatility, longer lead times, and higher logistics costs,” said Saurav Kumar, Managing Director, Protiviti Member Firm for India, particularly for exporters with exposure to Europe and North America. Freight rates on key routes have risen in recent weeks, while transit times have extended due to rerouting of shipments.
He added that such delays are affecting planning cycles and increasing inventory in transit. In some cases, companies are adjusting delivery schedules and increasing buffer stocks to manage uncertainties, which in turn is adding to working capital requirements.
On the supply side, Kumar noted that inbound shipments of certain components and materials are also seeing delays. He said electronics and semiconductor-linked components, along with some specialty materials, remain more exposed due to import dependence. This is particularly relevant as electronics content in vehicles continues to increase, making such disruptions more visible across the value chain.
He further indicated that higher logistics and input costs are adding pressure on suppliers, with limited ability in some cases to pass on these increases under existing contracts. This, he said, could result in margin pressure, particularly for export-oriented firms and smaller suppliers with relatively tighter working capital positions.
Offering an industry perspective, “this is a hydra-headed problem,” said Vinnie Mehta, Director General, Automotive Component Manufacturers Association of India (ACMA), pointing to simultaneous pressures across energy availability, raw material supply, and exports.
He noted constraints in industrial gases such as PNG, CNG, and LPG, which are used in processes like casting, forging, and heat treatment. These processes are energy-intensive in nature, making availability of industrial fuels a key operational factor. While some availability has stabilised in the case of PNG, he said LPG remains in short supply due to prioritisation for residential use.
Mehta also highlighted challenges across both energy inputs and raw materials, including constraints in industrial gases used in manufacturing processes, along with tighter availability of certain inputs such as petrochemical derivatives, aluminium scrap, and related materials. He said these factors are beginning to affect multiple stages of component manufacturing.
On exports, he said the industry continues to face logistical challenges, including longer shipping routes, container availability, and port congestion. The sector exports a significant share of its production, making it sensitive to disruptions in global trade routes. “You will export only if you are able to produce, and you will serve the domestic market only if production holds,” Mehta said, underlining the dependence on stable manufacturing operations.
“This year (FY26) definitely will be around the best. March should remain smooth, maybe a little beyond, but beyond that worries me,” Mehta said.
On cost dynamics, Mehta said it is difficult to generalise how increases are being passed on, as pricing discussions vary across companies. However, he acknowledged that cost pressures are being felt across the value chain, with smaller suppliers facing relatively higher stress due to working capital constraints.
Mehta also said the current situation brings focus on the industry’s dependence on external sources for energy and key inputs, adding that it may prompt a closer examination of energy choices and supply chain resilience going forward.
Both Kumar and Mehta indicated that the situation remains dependent on how current disruptions evolve. Mehta said that operations are likely to remain stable in the immediate term, including through March, but added that visibility beyond that remains limited if disruptions continue.