India’s auto component industry is posting healthy export growth, but the gains are masking persistent challenges in localisation and domestic value addition, industry executives and analysts say.
While demand from global automakers and replacement markets has supported exports, many component manufacturers continue to rely on imported raw materials, sub-assemblies and high-precision parts. This dependence exposes the sector to supply chain disruptions, currency volatility and cost pressures, even as overseas shipments rise.
Efforts to deepen localisation have gathered pace through policy support and production-linked incentive (PLI) schemes, but progress remains uneven across segments. Advanced electronics, semiconductors, specialised alloys and precision tooling are among the areas where domestic capabilities are still limited.
Industry players warn that without faster localisation, export growth may be difficult to sustain in the long term, especially as global buyers increasingly seek resilient, regionally integrated supply chains. Strengthening domestic ecosystems, investing in technology and skilling, and improving vendor development are seen as critical to closing the localisation gap while maintaining export momentum.