India-EU, UK FTAs to unlock next phase of auto component exports; long-term outlook remains robust: ACMA president Vikrampati Singhania

India's auto component industry is well positioned for sustained long-term growth, backed by rising domestic demand, expanding manufacturing investments, global supply-chain diversification and upcoming free trade agreements (FTAs), automotive component manufacturers association (ACMA) president Vikrampati Singhania said on Tuesday.

The remarks come as the domestic auto parts industry reported a record turnover of ₹7.60 lakh crore in FY26, reinforcing India's emergence as a preferred global automotive manufacturing and sourcing hub.

"The medium- to long-term outlook for the Indian auto component industry remains positive," Singhania said. "Growing domestic demand, infrastructure-led economic growth, expanding manufacturing investments, deeper global integration through Free Trade Agreements and increasing global sourcing from India are creating significant opportunities for the sector." However, he cautioned that geopolitical uncertainties, supply-chain disruptions, the availability of rare earth magnets, logistics costs and raw material volatility would require continued strategic focus.

FTAs to strengthen India's export competitiveness

Describing trade agreements as long-term growth enablers, Singhania said FTAs should not be viewed merely as market-opening arrangements. "Not only does it add new markets, but it builds new confidence. It builds a relationship between two partners," he said, noting that supplier qualification cycles take time before translating into higher business volumes. Europe emerged as the fastest-growing export market in FY26, with auto component exports rising to ₹2.12 lakh crore, aided by higher sourcing from European vehicle manufacturers and expectations surrounding the proposed India-EU trade pact.

China visit reinforces automation push

Singhania said an ACMA delegation recently visited the China Auto Show and several manufacturing facilities to study emerging technologies and evolving manufacturing practices.

"We went to China... to see what's happening with evolving technologies. We saw the scale that they operate and the amount of automation they have put in place. We certainly learned from it, and we certainly will implement that as we go forward," he said. He added that Indian component makers are stepping up investments in electric vehicle technologies, automotive electronics, infotainment systems and advanced manufacturing capabilities to remain globally competitive.

Automation to address labour challenges

Labour availability is expected to remain a structural challenge for the industry over the next several years, prompting manufacturers to accelerate automation and digitalisation. "Labour is a question to really examine for the next eight to 10 years. From manufacturing, I think we need to move into making manufacturing more automated, digitised and robotised," Singhania said, adding that automation would help improve scalability, operational flexibility and consistent quality for global customers.

No evidence yet that E20 fuel damages components

Addressing concerns around higher ethanol blending, Singhania said there is no conclusive evidence at present to suggest that E20 petrol damages vehicle components. "There's not enough data at this point of time to say whether this will damage or how much it will damage," he said. "At this point, there is no information from the OEMs that we need different kinds of components." He added that the industry would work with automakers to develop new materials and technologies if future fuel mandates require design changes.

FY27 outlook remains robust

Echoing the positive outlook, ACMA director General Vinnie Mehta stated the industry has begun FY27 on a strong footing and is expected to maintain its growth momentum. "The first quarter has been a very strong quarter. If we continue to grow as is, there should be no reason why we shouldn't be able to maintain the growth rate that we have. We can expect 8 to 10 per cent growth for the year," he said, attributing the optimism to healthy domestic demand, expanding exports and India's deeper integration into global manufacturing value chains through upcoming FTAs.