India Auto Component Industry Reaches ₹7.59 Lakh Crore in FY26

India Auto Component Industry Reaches ₹7.59 Lakh Crore

India's auto component industry closed FY26 with turnover of roughly ₹7.59 lakh crore, equivalent to about $86 billion, after growing at approximately 17% annually over the previous five years, according to Beyond Resilience, a report released by Boston Consulting Group and the Automotive Component Manufacturers Association of India in September 2026. The five-year expansion rate was materially higher than the sector's 12% compound annual growth over the ten-year period from FY16. Turnover stood at about ₹2.56 lakh crore in FY16, indicating that growth accelerated significantly during the second half of the decade and pushed the industry well beyond its pre-COVID level by FY26.

OEM Sales, Exports and Aftermarket Demand Accelerate

All three major demand channels recorded stronger growth during the five-year period. Sales to domestic original equipment manufacturers remained the largest contributor, reaching ₹6.63 lakh crore in FY26, while its annual growth rate increased from 11% over the ten-year period to 19% over five years. Exports reached ₹2.12 lakh crore, with growth accelerating from 12% to 17%. The aftermarket, although the slowest-growing channel, reached ₹1.08 lakh crore and increased its growth rate from 9% over ten years to 11% over five years. These figures show that expansion was broad-based rather than dependent on a single demand source.

Imports Continue to Offset Part of Domestic Component Demand

The three demand-channel figures together exceed the reported industry turnover because the industry measure accounts for imports. Under the report's definition, total turnover is calculated as sales to OEMs plus exports and aftermarket sales, less imports. Based on the FY26 figures, this implies imports of roughly ₹2.2 lakh crore. The calculation highlights an important structural feature of India's component ecosystem: although domestic manufacturing has expanded substantially, a significant portion of component demand is still supplied from outside the country. The industry's overall growth therefore combines stronger local production with an ongoing opportunity for deeper domestic sourcing.

Industry Turnover Has Climbed Every Year Since FY21

The industry's recent recovery followed a sharp downturn that began before the pandemic. Turnover declined from ₹3.96 lakh crore in FY19 to ₹3.50 lakh crore in FY20 and then to ₹3.41 lakh crore in FY21 amid the automotive slowdown, the BS-VI transition and pandemic-related disruption. Growth resumed in FY22, when turnover reached ₹4.21 lakh crore, followed by ₹5.60 lakh crore in FY23 and ₹6.15 lakh crore in FY24. The upward trajectory continued to ₹6.74 lakh crore in FY25 before reaching approximately ₹7.59 lakh crore in FY26, demonstrating sustained expansion after the sector's recent trough.

Localization and Import Substitution Strengthen

Two structural indicators also point to deeper domestic manufacturing capability. Localization has crossed 70% of industry requirements, compared with more than 60% a decade earlier, while domestic vehicle demand increased from approximately 20 million units in FY16 to 28.3 million units in FY26. Import substitution has also become measurable across selected component categories. Auto end-use imports of wheels and rims declined by about 74% between FY19 and FY26, while engine imports fell by about 39% and steering-part imports decreased by about 12%. Together, these developments indicate that higher domestic content is supporting a larger vehicle market while reducing dependence on imported components in specific categories.

Component Value Growth Outpaces Vehicle Volume Growth

The industry's value expansion has been substantially faster than growth in vehicle volumes over the ten-year period. Auto component turnover increased at roughly 12% annually, compared with approximately 3% annual growth in the vehicle market by volume. The gap indicates that the industry's expansion cannot be explained by higher vehicle production alone. Rising component content per vehicle has become an important contributor, alongside overall volume growth. Increasing localization, broader domestic sourcing and changes in vehicle content have therefore supported greater value creation within the component ecosystem. The trend also reinforces the growing economic importance of the sector within the wider automotive manufacturing base.

FY26 Growth Highlights Broader Structural Change

The FY26 performance shows an auto component sector that has moved beyond a simple post-pandemic recovery and entered a period of sustained structural expansion. Turnover has increased every year since FY21, while OEM demand, exports and aftermarket sales have all recorded faster five-year growth than their respective ten-year rates. At the same time, localization has risen above 70% and selected categories have recorded substantial reductions in imports. The findings from Automotive Component Manufacturers Association of India and Boston Consulting Group therefore point to an industry benefiting from both market expansion and greater domestic value addition, although the implied ₹2.2 lakh crore import base shows that further substitution remains possible.

Frequently Asked Questions

What was India's auto component industry turnover in FY26?
India's auto component industry recorded approximately ₹7.59 lakh crore in turnover during FY26, equivalent to about $86 billion, according to the Beyond Resilience report from Boston Consulting Group and the Automotive Component Manufacturers Association of India. The sector grew at roughly 17% annually over the preceding five years, significantly faster than its 12% compound annual growth over the ten-year period from FY16. Domestic OEM sales reached ₹6.63 lakh crore, exports reached ₹2.12 lakh crore, and aftermarket sales reached ₹1.08 lakh crore, before accounting for imports in the industry's reported turnover measure.