India’s auto components sector: exports, imports, and emerging clusters

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India’s auto components sector has become one of the country’s strongest growth stories — and a key pillar of its participation in the global automotive value chain. The sector is not just feeding domestic OEMs but also rapidly expanding its export footprint, offering compelling opportunities for global manufacturers and investors.

Growth in exports: a 73% jump since FY21

India’s automotive component exports have surged from US$7.4 billion in FY21 to US$12.8 billion in FY24, marking a 73% increase. Key categories driving this growth include drive transmission systems, engine components, and electrical & electronic systems, which together make up more than half (53%) of total exports.

India’s role in the global automotive value chain

Key global markets: U.S. and Europe lead demand

India’s components are powering vehicles across major global markets. North America accounts for 34% of exports, with the U.S. alone absorbing 28%, driven by demand from OEMs and the aftermarket. Europe follows with 27%, with Germany leading purchases of precision components. This strong presence in mature, high-standard markets underscores India’s competitiveness in quality and cost.

Imports: opportunities and challenges

Despite strong exports, India imported US$12.1 billion worth of auto components in FY24 — an 80% rise since FY21. Much of this demand stems from engine parts and Body-in-White (BIW) structures, highlighting gaps in domestic production capacity. China remains India’s top import source, supplying nearly 23% of all imported components. For investors, this dependency signals opportunity: localizing production of these high-value components can reduce supply chain risk and capture growing domestic demand.

Emerging manufacturing clusters and cost advantages

India’s component industry is anchored by established hubs like the Mumbai–Pune–Nasik–Aurangabad belt, Chennai–Bangalore–Hosur corridor, and the Delhi–Gurgaon–Faridabad region. Emerging clusters such as Sri City, Anantapur, and Sanand are rapidly gaining traction, supported by infrastructure development and proximity to OEM assembly plants.
These clusters, coupled with India’s cost-competitive labor and engineering talent, position the country as one of the most attractive manufacturing bases for global automotive supply chains.

India’s component sector is at an inflection point — growing exports, rising imports, and an evolving manufacturing ecosystem create both opportunity and urgency. Companies that localize production now can leverage India as a cost-effective sourcing hub, tap into a strong domestic market, and gain proximity to key global customers.

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Written by Anuj Kumar, Senior Consultant based in the India office.