- India’s auto component industry expects near-term headwinds but remains confident of steady growth, aided by trade talks, GST reforms and domestic demand.
India’s auto component industry is bracing for a more challenging second half of the year, even as it continues to deliver steady growth so far. Industry leaders report that new project activity has slowed in recent months, a trend that could impact long-term export growth, although the broader outlook remains stable.
Speaking to ANI, Automotive Component Manufacturers Association (ACMA) President Vikrampati Singhania described the slowdown as a “temporary phenomenon”, adding that the sector’s fundamentals remain intact.
Trade talks seen as a key buffer
With uncertainty in some overseas markets, the industry is looking to India’s ongoing bilateral and free trade agreement negotiations with the European Union, the United Kingdom and New Zealand to help diversify export opportunities. “Even if the US slows down temporarily, other markets will start falling in place to be able to soften the landing a little bit,” Singhania said.
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GST cuts spur domestic momentum
On the home front, Singhania said demand has been supported by the rationalisation of Goods and Services Tax (GST) rates on auto components. The move to a uniform 18 per cent slab from the earlier 28 per cent and 18 per cent structure has simplified operations and reduced confusion across the supply chain.
He noted, “As GST rates have come down in the number of categories in the auto side, demand has picked up, and because their demand has picked up, the auto component industry supply chain demand has picked up.”
He added that while international tariffs could create short-term disruptions, the government continues to deal with global partners to protect the interests of the Indian auto component supply chain.
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Solid first-half performance
Looking back at the first half of the fiscal year, Singhania presented that the industry posted growth of 6.8 per cent. This was supported by strong demand from original equipment manufacturers (OEMs), a recovering domestic aftermarket and resilient exports despite global headwinds.
“This first half of the year continues to be stable and overall robust from industry perspective. Overall growth of the industry has been about 6.8 per cent,” he said. Supply to OEs rose by over 7 per cent, while the domestic aftermarket recorded a “strong revival of about 9 per cent growth over the previous year”.
Export trends also remained supportive. “The US has broadly stayed stable from an India export perspective, whereas some other markets have grown. It takes OEs a long time to switch to alternative suppliers because the process of qualification, quality approval is not an instant thing,” Singhania said.
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First Published Date: 15 Jan 2026, 08:43 am IST
