Auto components sector clocks 12.7% growth; U.S. exports hold firm despite tariffs

India’s auto components industry grew 12.7% to a turnover of ₹7.6 lakh crore in FY26, while exports to the U.S. remained steady despite the imposition of 25% and 50% tariffs on different categories of auto parts.

Exports to the U.S. were valued at $7.3 billion with zero growth for financial year 2025-2026 or remained “as is”, said Vinnie Mehta, Director General, Auto Components Manufacturing Association at a press conference.

About half of India’s auto component exports to the U.S. attract a 25% tariff under Section 232 of the U.S. Trade Expansion Act of 1962, while the remaining half face a reciprocal 50% tariff. India is also subject to an enquiry on labour practices, industrial over capacity and if there are unfair subsidies to domestic industries.

The annual performance of the industry “was driven by robust domestic demand, higher vehicle production, sustained investments in capacity and technology, and steady export growth despite an increasingly uncertain global environment,” ACMA said

Supplies to original equipment manufacturers (OEMs) grew 16.3% during the year, driven by higher vehicle production across segments, including passenger vehicles (10%), commercial vehicles (13%) and two-wheelers (12%). The aftermarket expanded 9% on the back of a growing vehicle base and increased market formalisation, while exports rose 5% and imports increased about 13%. Supplies to the electric vehicle segment accounted for 4.6% of total OEM sales.

The Association’s President, Vikrampati Singhania said that labour shortages and cost of raw materials were among the headwinds facing the industry. He attributed the labour crunch to the higher cost of living in urban centres since the Gulf War, prompting many workers to return to their villages. Seasonal factors such as the harvesting season, elections and adverse weather have also further exacerbated reverse migration from cities.