India's Auto Parts Industry to Grow 10% Annually with Semiconductor, Defence, EV Expansion

India's precision machining and auto parts industry is projected to achieve a 10% annual revenue growth rate between FY26 and FY30, as per The ANI news report.  

This growth is attributed to diversification into sectors such as semiconductors, defence, aerospace, electric vehicles (EVs), and data centres, according to a Goldman Sachs report. 

Growth Drivers in India's Auto Parts Industry 

As per the report. the Indian auto component manufacturers are expanding beyond traditional automotive supply chains into high-growth industries. This shift is supported by increasing investments in precision machining, tooling, and manufacturing capabilities.  

The industry's revenue is expected to grow by 7% in FY27E, 12% in FY28E, and 10% in FY29E, with a compound annual growth rate (CAGR) of 10% from FY26E to FY30E. 

The industry's EBITDA is projected to grow at a 15% CAGR during the same period. Global initiatives by industrial, automotive, and semiconductor manufacturers to diversify supply chains are creating new opportunities for Indian manufacturers. 

Electrification and Export Opportunities 

Electrification, exports, and the global shift in internal combustion engine (ICE) manufacturing are key drivers supporting long-term growth.  

Expansion into industries such as defence, consumer electronics, semiconductors, and aerospace also contributes to this growth. India's competitive manufacturing costs and protected domestic market provide additional advantages for component makers. 

Read More: India's Gem and Jewellery Exports Rise 26.5% to $2.21 Billion in June 2026 on Strong Global Demand! 

Projected Revenue Growth and Market Position 

As per the report, the industry's revenue is expected to increase from $85.6 billion in FY26 to $124.4 billion by FY30.  

Indian auto component makers are well-positioned to benefit from higher-value manufacturing opportunities as global companies seek to diversify supply chains and demand rises for precision-engineered components across multiple industries. 

Conclusion 

India's auto parts industry is projected to grow at a 10% annual revenue rate from FY26 to FY30, driven by diversification into semiconductors, defence, aerospace, EVs, and data centres. The industry's EBITDA is expected to grow at a 15% CAGR during this period, with revenue increasing from $85.6 billion in FY26 to $124.4 billion by FY30. 

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