TL;DR
India's auto ancillary industry is set for 8-9% annual growth through FY27, driven by OEM demand, EV adoption, and localization efforts.
The Indian auto ancillary industry is poised for a sustained investment-led growth phase, with projections indicating an 8-9% annual expansion through fiscal year 2027. According to data from CareEdge Ratings, the sector's market size is expected to grow from approximately ₹9.835 trillion in FY26 to ₹10.681 trillion by FY27.
This robust growth is attributed to strong demand from original equipment manufacturers (OEMs), an increase in components required per vehicle, and a resilient aftermarket for replacement parts. The rapid adoption of electronics and clean mobility platforms, including the increasing penetration of electric vehicles (EVs) at roughly 8.28% in FY26, is a significant factor reshaping the industry. Government initiatives and the 'China Plus One' strategy are also driving localization efforts and expanding India's footprint in the global supply chain.
