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Technology

Auto ancillaries rev up for Rs 10.7-lakh-crore FY27

hellohimachalse@gmail.com 13 Aug 2026 1 hour ago

EV BOOM:

• FY27 growth: Industry projected to grow 8-9%

• Market size: Expected to reach `10.68l cr

• Key drivers: Localisation, OEM demand, exports and replacement market

• Exports: Projected at `2.3 lakh crore in FY27

• EV opportunity: EV penetration rose to 8.28% in FY26

Mumbai: The Indian auto ancillary industry is projected to grow by around 8-9 per cent in FY27, with its market size increasing from around Rs 9,835 billion (Rs 9.835 trillion) in FY26 to Rs 10,681 billion (Rs 10.681 trillion or Rs 10.681 lakh crore) in FY27, a new report showed on Thursday.

This is supported by healthy original equipment manufacturer (OEM) demand across major segments, increasing component content per vehicle, resilient replacement demand, higher localisation, and expanding global sourcing opportunities, according to the report by CareEdge Ratings.

“India’s auto component industry has emerged as an increasingly important part of the global automotive supply chain, supported by its manufacturing competitiveness, engineering capabilities, and expanding domestic market,” said Ranjan Sharma, Senior Director, CareEdge Ratings.

Continued progress in localisation of critical components and development of advanced manufacturing capabilities will be key to enhancing value addition and strengthening India’s long-term position in the global automotive ecosystem, he mentioned.

The domestic auto ancillary industry is entering a sustained investment-led growth phase, supported by expanding domestic vehicle production and increasing value addition across the automotive supply chain.

The transition towards electronics-intensive and cleaner mobility platforms is expanding the addressable market for component manufacturers, while localisation initiatives are creating opportunities across segments to reduce import dependence, said the report.

Total vehicle production increased from around 23 million units in FY22 to 34.7 million units in FY26, reflecting broad-based growth across vehicle segments.

Domestic OEMs remained the primary revenue driver, accounting for around 67 per cent of industry revenues in FY26, while exports and the aftermarket contributed around 22 per cent and 11 per cent, respectively.

In addition, the growing preference for SUVs and premium vehicles, coupled with stricter safety and emission norms, is increasing component content per vehicle and supporting demand for higher-value systems.

India’s growing integration into global automotive supply chains is expected to further support industry growth, with exports projected to rise to approximately Rs 2.3 trillion in FY27.

EV adoption in India has accelerated significantly, with overall vehicle registrations increasing from around 1.7 lakh vehicles in FY20 to 24.5 lakh vehicles in FY26, resulting in EV penetration rising from 0.71 per cent to around 8.28 per cent over the same period.

“The industry’s ongoing transition towards electronics-intensive and cleaner mobility platforms is creating new opportunities across EV-linked components, advanced electronics, powertrain technologies, and other high-value automotive systems,” said Arti Roy, Associate Director, CareEdge Ratings.

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