TL;DR
India's auto ancillary sector anticipates strong growth in 2026, fueled by rising vehicle demand, supportive policies, and the increasing component requirements of electric vehicles.
India's auto ancillary sector is entering a favorable phase, expecting robust growth in the coming quarters driven by a structural demand upcycle, supportive government policies, and an increasing vehicle content intensity. The industry recorded a turnover of approximately ₹6.7 lakh crore (around USD 80 billion) in 2025, marking nearly 10% year-on-year growth, with exports reaching nearly USD 23 billion.
The shift towards electric vehicles (EVs) is identified as a structurally positive factor for auto component manufacturers. EVs typically require higher electronic, lighting, and suspension content per vehicle, which is expected to enable component revenue growth to outpace overall vehicle production growth in the medium term. Analysts project a revenue growth of 7-9% in 2025-26, supported by resilient replacement demand and operational leverage benefits as volumes scale up.
