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Informist, Wednesday, Jan. 14, 2026

 

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--ACMA: Auto components industry Apr-Sept sales grew 6.8% on year
--CONTEXT: Comments by ACMA officials at press conference
--ACMA: Enhanced PV, light CV sales drove auto parts supply to cos Apr-Sept
--ACMA: Apr-Sept auto parts export grew 9.3% YoY, imports grew 12.5% YoY
--ACMA: International markets such as US, Europe remain under pressure
--ACMA: Auto parts exports to US remained steady in Apr-Sept
--ACMA: Rare earth magnets' availability a challenge for auto parts sector
--ACMA: Increasing freight costs a challenge for auto parts cos
--ACMA: US cos wary of new trade projects with India post higher tariffs
--ACMA: Existing supply chains with US for auto parts cos to sustain for now
--ACMA: Robust auto production cushioned impact of external stress
 

 

NEW DELHI – Anecdotal evidence from conversations with Indian automobile ancillary companies suggests that there is a "lot of hesitation" among companies in the US, Canada, and Mexico to source new projects from India after US President Donald Trump slapped 50% tariffs on Indian imports, a senior member of the Automotive Component Manufacturers Association of India said Wednesday. "While immediately the trade (between US and India) may not take a big hit, you will see hesitation in people awarding businesses to India in a year, two years, three years down the line," Sriram Viji, president-designate of ACMA and managing director of Brakes India Pvt. Ltd., said at a press conference.

 

"This is a big cause of concern for many people in the industry. India has a disadvantage (against countries that have negotiated lower tariff rates with the US). Even a 10% tariff rate difference between countries will make a significant shift in trade because margins are relatively thin and absorbing those kind of price differences is very hard for companies," Viji said. 

 

Indian companies exported $12.2 billion worth of auto components in the first six months of 2025-26 (Apr-Mar), up 9.3% on year. The US and Germany remained top export destinations for Indian auto parts. Exports to North America grew to $3.64 billion in Apr-Sept, mildly higher on year, while exports to Europe grew 11% on year to $3.73 billion during the same period. While exports of auto parts to the US remained steady in the first half of the year, these are expected to fall in the second half, as the US' tariffs on India came into effect from September.

 

"Unless we see either some resolution on this front or at least stability and clarity on where things are going, there will be some challenges going forward with respect to trade, specifically with respect to the US," Viji said. Indian companies exported $3.24 billion worth of auto parts to Asian markets in Apr-Sept, up 18% on year. "At least at this juncture, the international demand for exports seem to be stable, barring the US," ACMA's Director General Vinnie Mehta said. 

 

ACMA President Vikrampati Singhania noted that Indian auto parts makers would gain from bilateral trade agreements at this juncture as the country attempts to finalise a trade deal with the Trump administration. ACMA is currently looking forward to finalisation of India's trade agreement with the European Union, after similar deals were signed with the UK and New Zealand, Singhania said.

 

"New awards or new contracts that are due (with the US) are in a little bit of a limbo," Singhania said. Indian companies' existing supply chains with the US are expected to continue for some time, as these companies cannot switch suppliers quickly, he added.

 

The turnover of India's auto components industry rose 6.8% on year to INR 3.56 trillion in Apr-Sept, ACMA said. Revenue from supply of parts to original equipment manufacturers increased 7.3% on year to INR 3.04 trillion. "It is important to note that this export growth was achieved despite significant global headwinds, including supply chain disruptions, raw material cost pressures, and weakening aggregate demand in key markets," ACMA said in a statement.

 

Indian companies imported auto components worth $12.3 billion in Apr-Sept, up 12.5% on year. China, Japan, and Germany were India's leading source of imports. Exports of auto parts grew at a slower pace than imports in the first half of 2025-26 (Apr-Mar), resulting in a trade deficit of $180 million in Apr-Sept, compared with a surplus of $150 million a year ago.

Even as growth in overseas markets remained a challenge, domestic demand for automobiles has picked up. "The reduction in GST (goods and services tax) on select vehicle categories is expected to support demand momentum in the second half of FY26, particularly in passenger vehicles and two-wheelers, with potential positive spillovers for the component ecosystem," ACMA said. Supply of auto parts to companies got a boost from enhanced sales to passenger vehicle and light commercial vehicle segments. Increased demand has pushed up production of automobiles, which helped cushion the blow due to external stress, ACMA said.   

 

According to ACMA, favourable GST rates and a stable domestic demand are expected to support growth going ahead. Emphasis on development of infrastructure, increased investments, and capacity expansion are expected to support growth of auto parts companies as well.

 

However, ongoing geopolitical challenges and increasing freight costs could limit these companies' growth, ACMA said. Availability of rare earth magnets too is a challenge. "We are happy that the government has acted very proactively in making a new policy for rare earths. But again, for it to lead to production will take a good one-and-a-half years to two years. And therefore, the in-between period in managing the supply chain disruption will weigh heavily on our minds," Mehta said.

 

Rare earth magnets are key input materials for all automobiles, especially those running on electricity, and China has the biggest production and processing capacity for these elements. With China cutting down Indian access to rare earth magnets, companies have resorted to alternative methods to make do without them. "Wherever people have been able to manage, the costs have gone up very, very significantly multiple times. Sometimes even more than 10 times... and therefore, we do need a cleaner solution," Mehta said.   End

 

US$1 = INR 90.30

 

Reported by Anand JC

Edited by Tanima Banerjee

 

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