India’s Auto Component Industry Grows 9.6% in FY25, Nearly Doubles in Five Years

India’s automotive component industry clocked a turnover of Rs 6.73 lakh crore ($80.2 billion) during the financial year 2025, according to the Automotive Component Manufacturers Association of India (ACMA). This represents a 9.6% year-on-year growth, outpacing the rise in domestic vehicle volumes. Over the past five years, the industry has nearly doubled in size, registering a compound annual growth rate (CAGR) of 14%.

“The Indian auto component sector continues to be a cornerstone of the country’s manufacturing prowess. FY25 was yet another milestone year where the industry’s growth was underpinned by strong domestic demand, rising exports, and increasing value addition,” ACMA President and Subros CMD Shradha Suri Marwah said.

Auto component supplies to OEMs totaled Rs 5.70 lakh crore, marking a 10% year-on-year growth, attributable to an 8% rise in domestic vehicle production. Increased consumption of value-added components and a market shift towards larger, more powerful vehicles continued to boost the auto-components sector's turnover. Supply to EVs accounted for 6.7% of the total supply to OEMs.

This growth came amid sluggish passenger vehicle and commercial vehicle sales growth in India. Car sales grew almpst 2% on year during the FY2025 while the commercial vehicle industry volume declined 1.2%. Two-wheeler volumes, however, grew at a robust rate of 9%. In the current financial year, passenger and commercial vehicle sales are projected to remain sluggish with growth expected in low single digits.

ACMA Director General Vinnie Mehta noted that the trade surplus during the financial year was $453 million, with auto component exports growing 8% on year to $22.9 billion (Rs 1.92 lakh crore). Imports stood at $22.4 billion, growing 7.3%. The trade surplus during the financial year 2024 was $300 million.

North American exports, representing 32% of the total, rose 8.4%. In contrast, European exports, accounting for 29.5%, decreased by 2.1%. The Asian market saw robust growth of 15.1% and making up 26% of exports. Exports were primarily concentrated in categories such as drive transmission & steering, engine components, suspension, braking, and body & chassis parts.

Aftermarket component sales registered 6% growth during the year to Rs 99,948 crore ($11.8 billion) on the back of expanding used vehicle base, formalisation of the repair ecosystem and stronger rural demand supported by e-commerce penetration.

“The fiscal year witnessed broad-based growth and recovery across segments. While two-wheelers demonstrated robust growth, the passenger vehicle and commercial vehicle segments experienced steady, albeit moderate, momentum,” Marwha said.

Meanwhile, the association also flagged the limited availability of rare-earth magnets. As Beijing intensified its control over rare earth exports from April, the automotive sector is feeling the immediate impact. Companies and the government are urgently working to secure alternative supply chains before their production lines are forced to a standstill.

“The limited availability of rare-earth magnets remains a concern, underscoring the need for a national strategy on critical materials to secure the future of EV and mobility manufacturing in India,” Marwah said.