India’s auto component industry at inflection point as India-EU, India-US FTAs unlock global markets: Jitin Prasada

India’s auto component industry is at a defining inflection point as free trade agreements (FTAs) with the European Union and the United States begin to redraw global sourcing and manufacturing equations, Union Minister of State for Commerce and Industry Jitin Prasada said on Thursday.

Prasada, who inaugurated, ACMA-Automechanika 2026, stated that the convergence of market access, geopolitical realignment and domestic manufacturing capability has created a narrow but critical window for Indian suppliers to embed themselves deeper into global automotive value chains.

The monumental moment for auto parts industry

“The real opportunity lies now,” Prasada said, referring to the India–EU and India–US trade agreements, which he described as among the most consequential deals India has negotiated. He said these pacts go beyond tariff reductions and should be seen as strategic instruments that can reposition India as a preferred manufacturing and sourcing hub for the global automotive industry.

Prasada credited Prime Minister Narendra Modi for steering the agreements amid heightened geopolitical tensions, noting that trade diplomacy has become central to India’s long-term growth strategy.

India–EU FTA opens access to 27-country market in one stroke

The proposed India–EU Free Trade Agreement offers Indian component manufacturers access to a single market spanning 27 countries. “As far as the EU goes, we are getting access to 27 countries in one shot,” Prasada said, highlighting the scale of the opportunity for Indian exporters.

For the auto component sector, the EU pact could lower entry barriers into one of the world’s most regulated and quality-sensitive automotive markets, where compliance, traceability and precision engineering are critical.

Compliance, technology and EV push align with European demand

Industry experts believe deeper integration with Europe could accelerate technology adoption and push Indian suppliers towards higher-value segments such as automotive electronics, powertrain components and EV-related parts. Europe’s shift towards cleaner mobility and tighter emission norms also aligns with India’s growing capabilities in electrification and advanced manufacturing.

Prasada said India’s broader FTA network now provides preferential access to nearly 65% of the global market through agreements with countries such as Australia, the UK, New Zealand and Oman. “This is truly historic,” he said.

India–US trade deal nearing closure as supply chains diversify

On the India–US front, Prasada said negotiations are at an advanced stage and an announcement is expected soon. “As far as America is concerned, I can assure you that the deal will be out very soon,” he said, adding that the agreement has been structured to respect the economic sensibilities of both nations.

“The opportunity is very complementary,” he noted, indicating strong alignment between India’s manufacturing strengths and US demand for diversified and resilient supply chains.

Electronics, EV parts and high-value systems seen as key beneficiaries

The US deal is expected to be particularly significant for Indian suppliers of electronics, EV components and high-value automotive systems, as global automakers look to reduce dependence on a narrow set of sourcing geographies.

Prasada said incentives under schemes such as the Electronic Components Manufacturing Scheme are aimed at accelerating localisation and strengthening India’s competitiveness in next-generation vehicles. “With the quality and precision of the Indian auto component industry, we can be a trusted partner for the EU and the US,” he said.

Meanwhile, Vikrampati Singhania, president of the Automotive Component Manufacturers Association of India (ACMA), said Indian suppliers are increasingly being recognised as reliable global partners serving OEMs and aftermarket customers worldwide.