China’s Share of India’s Auto Component Imports Soars to 36% in FY26, Reports ACMA

The Automotive Component Manufacturers Association of India (ACMA) has released its Performance Review for FY2025-26, highlighting a 12.7% growth in the Indian auto components sector, resulting in a turnover of ₹7.60 lakh crore ($85.9 billion). Despite this growth, imports from China have risen to 36% of total imports, an increase from 29% in the previous fiscal year. This reliance on Chinese imports is attributed to various factors, including technology needs, price competitiveness, and temporary domestic capacity constraints. The U.S. remains the primary export destination, accounting for 26% of total exports.

This data underscores both the growth potential of the Indian auto components sector and its vulnerabilities. For the common citizen, this could mean improved availability of auto parts, potentially leading to lower vehicle prices and enhanced options in the market. However, the heavy reliance on Chinese imports could raise concerns about domestic manufacturing capabilities and job security in the long run. Furthermore, as the sector shifts towards global sourcing, any disruptions in international trade or geopolitical tensions could adversely affect market stability and pricing.

Looking ahead, the long-term outlook for the auto component industry appears optimistic, with projected growth rates of 8-10% for the current fiscal year. The government and RBI may need to focus on policies that promote domestic manufacturing capabilities and reduce import dependencies. Initiatives may include fostering innovation, incentivizing local production, and negotiating favorable Free Trade Agreements (FTAs). These steps can ensure that the growth trajectory is sustainable and that domestic manufacturers can compete effectively in the global marketplace.

Source: The Hindu

(Expert Note: This report was independently prepared by the Wealthova Economy team.)